Core consumer prices in the US are rising at their slowest pace since records began, bolstering the case for the Federal Reserve to complete its planned $600bn in asset purchases and then extend it to buy more.

Excluding volatile food and energy prices, the consumer price index rose by only 0.6 per cent on a year ago according to the Bureau of Labor Statistics, the lowest rate of inflation since the series began in 1957.

The data underline how the high level of slack in the US economy – with 9.6 per cent unemployment and many factories standing idle – is continuing to put downward pressure on prices and creating the risk of still lower inflation or a slide into outright price declines. The biggest goal of the Fed’s new $600bn round of quantitative easing – nicknamed QE2 – is to get inflation moving back to-wards its target of “about 2 per cent or a bit below” by pushing down long-term interest rates.