Surprise fall in US inflation offers hope

By James Politi, Andrew Ward and Krishna Guha in Washington

Published: March 14 2008 13:41 | Last updated: March 14 2008 19:54

A surprise fall in inflation last month on Friday offered a glimmer of hope that price pressures could be softening in the face of economic weakness, giving the Federal Reserve greater scope to cut US interest rates.

The news came as president George W. Bush sought to calm nerves over the deteriorating economy by voicing optimism about the long-term outlook. Mr Bush assured the public that the Federal Reserve and Treasury Department would take “appropriate steps” to promote financial market stability.