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September 2000 Fuel Crisis
Oil prices and inflation
There is a lagged effect at work here. If the increase in oil prices stays with us for longer than just a few weeks, it will begin to affect RPI inflation and economic growth. In fact the chief IMF economist, Michael Mussa, says that world growth could be cut by 0.5% next year even if the oil price falls from now on. Mr Mussa calculates that the effect on inflation will be
considerable, adding $200 billion to world energy costs. Why do you think this will mean higher inflation for us all?
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