Pressure on America’s central bank to raise interest rates has intensified after rising energy costs, supply shortages and increased consumption sent US inflation surging to a level not seen for more than 30 years.

Although the Federal Reserve has repeatedly insisted price pressures will prove “transitory”, financial markets were taken aback by a 6.2% increase in the cost of living in the world’s biggest economy over the past year.

A labor department report released on Wednesday showed prices rose by 0.9% in October alone – more than double the 0.4% jump in September – to push the annual rate of inflation to its highest level since December 1990, a time when global oil prices had risen sharply due to the Iraqi invasion of Kuwait.

The news came after the Biden administration and the Federal Reserve tried to downplay rising costs, arguing they are a temporary phenomena driven by Covid-19’s unprecedented impact on the global supply chain.

The increase was “broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors”, the labor department said. “The energy index rose 4.8% over the month, as the gasoline index increased 6.1% and the other major energy component indexes also rose. The food index increased 0.9% as the index for food at home rose 1%.”

Last week Fed chair Jerome Powell warned that inflation had been “longer lasting than anticipated”. Powell said the Fed still expected recent price rises to be “transitory” but added that it was “very difficult to predict the persistence of supply constraints or their effects on inflation”.

Energy prices are up 30% on a year ago, while food is up 5.3%. US consumers are paying more for clothes, car parts, shelter, energy, food and lawnmowers.

US core inflation – which strips out volatile items such as energy and food also jumped by more than Wall Street had anticipated, rising from 4% in September to 4.6% in October, its highest since 1991.

Major economies across the world are also suffering price rises caused by inflationary pressures. On Wednesday Beijing said inflation in China rose at a 1.5% annual rate last month, a doubling from the 0.7% annual rate in September, while German inflation came in at 4.5% in October versus 4.1% in September.

The Bank of England, which last week predicted that UK inflation could rise above 5% next spring, has so far adopted the same approach as the Fed, leaving borrowing costs at the emergency level they reached in the early stages of the Covid-19 pandemic.

Part of the latest surge in US prices was down to factors that may prove short-lived, economics forecaster Capital Economics wrote in a note to investors. US fuel prices surged in October but have since begun to fall and shortages of microprocessors and other parts are still contributing to a lack of inventory for car sellers that is driving up prices.

But Capital Economics also warned it was difficult to tell when these inflationary pressures would stabilize.

“The bottom line is that, while it remains difficult to predict how far or for how long the various ‘transitory’ factors will boost inflation, there is increasing evidence that inflationary pressures are broadening out, underlining that inflation will remain elevated for much longer than Fed officials expect,” they wrote.