Saturday, Jul 07, 2007
£1+ petrol; CPI and interest rates to follow.
Guardian: Petrol 'to break through £1 a litre'
A rather damning article, showing that petrol could surge above £1/ltr. More worrying, it cites reasons why this will not abate in the short-term and that it could get much worse, with other factors to play. More interestingly, OPEC are refusing to increase quota's. Could this be because they don't have spare capacity to absorb such shocks?
£1 petrol prices alone could send CPI upwards again on a trajectory towards 3% in a very short timescale, with pipeline pressures to follow in the medium term if higher prices persist. Could this trigger a back to back rise, or will the MPC decide to sail through this "short-term" turbulence?
Posted by planning4acrash @ 12:52 AM (126 views) Add Comment
4 Comments
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1. mike said...
And yet the yanks company at "gas" being over $2 / GALLON!! thats a £1 per gallon at todays exchange rate folks, what does that tell you about taxes? You'll be better off importing petrol from the states soon.
2. Searching For Accommodation said...
Producers' cartel Opec has resisted calls from the International Energy Agency, representing 26 industrialised nations, to increase production in a pre-emptive move - looking at Peak Oil predictions and latest info from drilling in Saudi Arabia's biggest field it may be that the reserves underground are no longer able to meet increasing demands of world's oil thirstt http://www.theoildrum.com/node/2325
£1 a litre might look cheap in future...
3. planning4acrash said...
Yer, but just as low mortgage rates have fuelled high house prices here, low fuel rates in the US have encouraged greater commuting, bigger engines and less public transport in the US. Therefore, whilst Americans pay more per litre, we probably pay less per family on fuel, with many, particularly poor Londoners, having cheap or free bus passes that have been frozen for a few years and are about to be cut by 10%. So, many Londoners are getting to work on about £10/week. Therefore a slight rise in the US effects many, particularly the poor, who often don't have public transport to fall back on, like we have in Europe, and who tend to live way out in the suburbs, so drive heaps. This could have further implications for sub-prime, combining with with higher interest charges on mortgages to make it less affordable to live in the cheaper suburbs, potentially amplifying the sell off and foreclosures.
4. Rimmer said...
Mike
I think you mean complaine
Also in most states fuel is now $3 a gallon and thats a US gallon ( which is 80% an imperial one ) i agree it still makes it about 40% the price we pay but given the wide spaces and USA economy it has to be that way, in the UK we like lots of tax so we can spend it on wasters and losers, we like to pay for the education of all our murderers and money for people that would rather not work <<< Now you know why our fuel is 2 1/2 times what the americans pay