Oil’s Surge Threatens to Undo Britain’s Inflation Relief
The jump in crude prices driven by the Gulf war threatens to reverse the fall in British inflation that has buoyed Mr Burnham’s opening days. Brent’s climb above $95 a barrel feeds quickly into petrol and diesel, the very costs that pushed headline inflation down to 2.6 per cent in June, a fifteen-month low. Forecasters already expected inflation to climb back towards 3.4 per cent by the autumn; the oil spike sharpens that risk.
June’s easing, reported by the Office for National Statistics, owed much to cheaper motor fuel during a brief lull in the oil market — a lull now decisively over. The Ofgem energy price cap rose this month, and a sustained move in crude would lift forecourt prices within weeks, squeezing households just as the government trumpets cheaper bills and bus fares. It also complicates the Bank of England’s task before its 30 July decision. Watch pump prices and the next inflation print for the first signs of the war reaching British wallets.