Is the economy going back to the 70s?

WHEN the oil price hit $100 a barrel at the start of this year, it was a curiosity but not a cause for great alarm. The price had, after all, topped $70 in the summer of 2005 when Hurricane Katrina struck, risen above $80 in 2006 and been hovering in the $90s for some time.

But last week


With it came almost daily rises in the forecourt price of petrol and diesel. And with oil and other commodity price rises yet to feed through to the cost of most products and services, a new and worrying consensus is emerging in the financial markets and business.

The fear is that this is not a short-term inflation blip, as the Bank of England and the Treasury want everybody to think, but a more permanent shift into a more inflationary world.

Times of London