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Petrol will hit £5 a gallon as inflation rises for the first time since February
Jonathan Prynn, Consumer Business Editor17 Nov 2009
Surging petrol prices have pushed the rate of inflation up for the first time since February.
The Government's official measure of the cost of the living, the Consumer Prices Index, rose 1.5 per cent in October, compared with 1.1 per cent in September.
The City expects inflation to continue rising at least until the New Year because of the rising oil price and the return of 17.5 per cent VAT in January.
Petrol is expected to hit 110p a litre, or £5 a gallon, by Christmas, the highest level since September last year and a 26 per cent rise since the start of the year.
The most expensive petrol in London is at Texaco's Chelsea Cloister garage where a litre of unleaded costs 112.9p and diesel is 114.9p.
However, most analysts said the increase in inflation is likely to be temporary and will not bring forward the date when the Bank of England raises its record low interest rate.
Colin Ellis, of Daiwa Securities, said: “Higher energy prices and a weaker exchange rate, which has pushed up goods price inflation this year, cannot by themselves generate permanently higher inflation — they just result in a temporary surge. The Monetary Policy Committee should look through these price movements, and the short-term volatility that will be seen over the next few months, and focus instead on underlying inflationary pressures.”
Howard Archer, of IHS Global Insight, said: “October's spike in inflation looks set to be the start of a relatively short, sharp rising trend as unfavourable base effects resulting from the plunge in oil prices a year ago and VAT changes exert upward pressure.” Motoring groups have accused oil companies of forcing forecourt prices up to unjustifiable levels. The last time petrol prices were as high the oil price stood at $100 a barrel compared with the current $80.
AA spokesman Luke Bosdet said: “To the average driver this is madness. Why are prices in an oil glut not falling rather than rising to levels not seen before at this time of year”
Rush for Polish food a sign of jobs bounce
Sales of Polish food have risen for the first time in almost a year in a trend seen as an indicator of economic recovery.
Demand for the delicacies slumped by almost a quarter earlier this year as an estimated 200,000 construction workers and au pairs returned home as jobs dried up and the pound fell against the zloty.
The latest figures from Tesco point to a 15 per cent recovery in sales in recent weeks as the flow of migration starts to reverse. Tesco has almost doubled the number of Polish food lines this week to 211. Its Polish foods buyer Tomasz Zarebinski said: “Many Poles found it equally hard over there and have come back. That has led to the first rise in demand for Polish food for nearly a year.”
Among the range are Lowicz ready meals, Drosed pate, as well as favourites such as golabki (cabbage rolls), flaki (tripe), fasolka (beans), and beers such as Tyskie. Polish unemployment currently stands at 10.9 per cent compared with 7.8 per cent in the UK.
Reader views (8)
When will these "motoring groups" ever see sense! this is nothing to do with oil companies - Inflation is what get when you give money away to speculators at 0.5% and pump a further £200bn of cheap money into the economy...
- Zadi, london, 17/11/2009 23:14
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£5.00 or £10.00 a gallon, what difference does it make?
We will still not be willing to give up driving.
May be that will speed up the process of finding alternatives to petrol.
Lots of people have still not got the message about the environmental issues facing us.
The government will have little option than to raise taxes, most probably on petrol, to invest in new technology.
We're back to square one.
Look at it one way or another, you and me will face more expensive petrol prices.
On a positive note, petrol is still a fraction of the cost of a pint.
Howzat!!
- Ash, London, 17/11/2009 23:10
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We the public are being ripped off and we need to standup together to stop this daylight robbery. It needs all to act together and not just the few,
Tax tax tax thats all the government does
- Hunsa, ilford, 17/11/2009 19:08
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Haha that comment makes me laugh, they've also raised public transport prices too! So basically, whatever you do in this country your screwed.
- Nikita, England (The most expensive Country), 17/11/2009 18:35
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I am afraid Dhan Raj's comment sums (no pun intended) up the overall state of intelligence in this 'X factor' country.
Remember too that prices will also rapidly rise after the increase in VAT in janauary. Fuel duty is 'double taxed'. If it wasn't for motorists the MP's alowances would be zilch.
- Paul B, London, 17/11/2009 17:51
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I don't know about you but I pay for my petrol by the litre, and its cheaper. This country is not paying its fair share on fuel duty; we are consuming far too much petroleum and polluting the planet.
- Dhan Raj, Basildon, 17/11/2009 16:03
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There are a couple of falsehoods in this story: firstly, fuel is already over a fiver in London and not just in Chelsea. There are any number of petrol stations offering unleaded for 112p a litre, which equates to £5.10 per gallon.
Secondly, inflation has been on the rise all year. Anyone who has renewed any form of insurance, bought food shopping or paid a utility bill will know that inflation has been rising for years. The government's official measure may only just be registering a rise, but that is a reflection of the stupidity of their calculation, since it includes such regular, staple purchases as plasma TVs and DVD players.
- Nobby Clark, Perth, the Scottish one, 17/11/2009 15:30
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We are an oil producing nation, we should have some of the cheapest petrol in the world. Their needs to be an inquiry in to this. I say we all stop driving our cars and and just take public transport, maybe then they will listen when sales drop?
- Porky Pies, Land of Make Believe, London, 17/11/2009 14:43
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