The spectre of rising inflation is lurking in the background of the US economy as October's wholesale prices saw their sharpest increase in fifteen years.

The producer price index rose 1.7% last month, compared with a 0.1% rise in September. Energy and food costs led the increases.

As a result some economists fear the Federal Reserve's hike of interest rates last week to 2% will not be enough to keep inflationary pressures under control, with steeper rises needed in the coming months.

Higher food costs are blamed on crop disasters following this year's dramatic weather conditions and energy costs have spiralled as a result of crude oil prices peaking at $55 (€42, £29) a barrel in October.

Other financial commentators believe there may be greater impact on company profits than on inflation, at least in the short term, as producers swallow higher prices without passing them on to consumers.

But Mark Vitner of financial analysts Wachovia warns: "The run-up in producer prices is going to gradually seep into consumer prices. It doesn't hit all at once."

Data sourced from USA Today Online; additional content by WARC staff