Tuesday, August 09, 2005

UK petrol prices hit new record

BBC News: UK petrol prices hit new record

Lib Dem Treasury spokesman Vince Cable says:

"I think it's quite likely that prices will continue to rise in the short and medium term - by that I mean weeks and months ... But there is a sort of basic law here that what goes up must come down. High prices lead to low prices and I think too many people are assuming that this period of very high prices is going to continue indefinitely, and it won't."

Now, I have some faith in economic cycles etc, but surely it's a little remiss to claim that, in the long term, prices will flatten out and we'll all be happy little drivers...

The other interesting thing, for me, is how this relates to the various market swings as influenced by the interest rates. The balance between production and debt is pretty fine these days, but both are hit pretty hard if the price of oil and petrol go up - twicefold, as consumers pay both for their own usage, and for that used in the production of stuff they buy, while businesses pay in the production stage, and indirectly as consumers have less money to buy their stuff.

In other words, are we being squeezed yet?

1 comment:

Anonymous said...

Hit $3.00 a gallon here last week. Never thought I'd see the day.