In the United Kingdom inflation is falling marginally to about 5%. Many economists think that by late 2012 UK inflation will be below 2%. The simple explanation is that the very high inflation is largely due to high fuel prices, but has been mitigated to a small extent by lower food prices, lower air fares and lower petrol prices. I understand the simple explanation but there is a more complicating factor which the economists are ignoring. The so called quantitative easing has injected many hundreds of millions of pounds into the economy. That money must, inevitably, result in inflation. No one seems to address the point of  how that will affect inflation. Continue reading

Petrol Prices will rise

In the United Kingdom petrol, which Americans call gasoline, is always expensive. It cost does not seem to restrict the demand for it. Now just before Christmas, petrol costs, according to Experian Catalist and average of £1.22 a litre. That is equivalent to about $7 a US gallon. I understand in the United States gasoline sells at between $3.20 a gallon in California to $2.60 in Colorado. Continue reading

Petrol price rewards the polluter!

The United Kingdom’s economy is in recession at the moment – that means that the size of the economy is shrinking. However, inflation is rising and the consumer price index rose to 1.9% in November and the Retail price index also rose (for the first time to 0.3%. Continue reading

Oil prices and why the price at the pumps is not falling

The price of oil has fallen to where it was in March of this year, although you would not notice it by reading the price of petrol and diesel at the pumps or by your heating oil fuel bill. Some analysts are puzzled, other say that oil speculation has stopped and others say that the twitchy casino punters that form an integral part of our energy markets have been assured by OPEC deciding not to cut back production and the failure of the recent Gulf of Mexico hurricanes to wipe out oil rigs and refineries. Continue reading