WASHINGTON, Thu Aug 14, (bdnews24.com/Reuters) - Consumer prices rose at twice the rate expected in July to post the fastest rate of year-over-year growth in 17-1/2 years, pushed up by costlier energy and food, a government report on Thursday showed.

The Labor Department said the Consumer Price Index, considered a key gauge of inflation, rose 0.8 percent in July after a 1.1 percent jump in June. That was far above the 0.4 percent gain that economists polled by Reuters had forecast for July.

Prices were up 5.6 percent from a year ago, the sharpest year-over-year rise since 5.7 percent in January 1991. That was also well above the 5.1 percent increase that economists had forecast.

Energy prices rose 4 percent in July after a 6.6 percent June gain and were up 29.3 percent on a year-over-year basis. Food costs rose 0.9 percent following a 0.8 percent June increase and put food costs 6 percent higher than a year ago.

Excluding volatile food and energy items, the so-called core CPI rose 0.3 percent in each of June and July, slightly above forecasts for a 0.2 percent gain in July. On a year-over-year basis, core prices rose 2.5 percent in July, slightly more than the 2.4 percent rise that was forecast.

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