Inflation hits eight-month high of 2.6%; US Federal Reserve widely expected to cut interest rates by a quarter point

Ian Stewart, chief economist at Deloitte, warns that high wage growth and surging government spending could keep inflation high for longer.

The big declines in inflation are behind us. Next year inflation is likely to run closer to 3.0% than to its 2.0% target. Wage growth of over 5.0% and a surge in government spending could keep inflation higher for longer.