Inflation is rising at its fastest rate in 17 years, according to new figures from the labor department.

Consumer prices jumped 0.8 percent in July, following a gain of 1.1 percent in June.

Prices were up 5.6 percent on a year ago, which represents the biggest year-over-year rise since January 1991

Energy prices rose four percent in July and were up 29.3 percent on the same month in 2007. Food costs, meanwhile, have also gone up and are now six percent higher than a year ago.

Commenting on the figures, Steven Wood of Insight Economics told USA Today that the Federal Reserve is now in a difficult position.

"At the present time the Fed is caught between a rock and a hard place, with renewed financial turmoil, a deteriorating economy and climbing inflation," he stated.

Across the Atlantic the situation is even worse. Consumer prices inflation in the UK climbed to 4.4 percent in July, well ahead of the government's target of two percent.

Americans who face high gasoline and food costs may need to consider debt management plans in the near future.

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