Tuesday, Jul 17, 2007
Pumps running dry and no CPI slack to deal with fuel inflation
Financial Times: Oil price nudges towards record high
"The oil price on Monday skirted record highs above $78 a barrel, prompting policymakers to warn about the inflationary impact of rising energy costs,, Goldman Sachs, the US bank, warned prices could surge to $95 a barrel within six months without increased production from the Organisation of the Petroleum Exporting Countries". $95 a barrel could send inflation to anywhere between 3-4% in a short time, leading interest rates to anywhere between 6-8% if sustained. In the meantime, petrol will go above £1/ltr very soon and all of this will eventually feed through into food and manufacturing prices. Lets see how that affects the BOE's up and coming inflation report. Can we expect a back to back rise for August?
Posted by planning4acrash @ 03:24 AM (160 views) Add Comment
3 Comments
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1. Stoatgobbler said...
I doubt it - too many doves, but this oil/food equation will drive inflation, and hikes later this year. Risk-aversion index going north again today as sub-prime back in focus by the way...
2. Rimmer said...
Quote
"$95 a barrel could send inflation to anywhere between 3-4% in a short time"
Hows that when inflation in real terms is already at 7 - 8% PA Now
3. dohousescrashinthewoods said...
Not enough balls for a back to back, but I think it draws the next one in a little closer.