UK Oil and Food Prices Expected to Rise in 2017

Households are being warned to brace for more price rises on fuel, food and other essentials in 2017 after the new year started with petrol at a two-year high.

The AA says motorists in the UK are paying an extra 15p a litre, or £8.25 a tank on average, compared with a year ago, while economists say a higher oil price and weak pound will probably push petrol and diesel prices up further this year.

Planned production cuts by countries in the Opec oil cartel and by non-Opec countries have pushed the oil price higher in recent weeks. On Tuesday Brent crude was up 2.3% to above $58 a barrel.

It is resulting in higher prices on forecourts and the AA said petrol over the weekend averaged 117.90p a litre compared with 102.69p at the same time last year. The price is now the highest since December 2014. Diesel rose to 120.35p a litre compared with 105.99p a year ago.

“Drivers have had a bad start to 2017, seeing 1p, 2p and even 3p ticking up on the fuel price boards over the Christmas and New Year holiday period. Petrol is back to where it was in December 2014 and diesel at a level last seen in July 2015,” said the AA spokesman Luke Bosdet.

Households are also facing higher food costs, according to a separate report suggesting UK grocery prices rose between November and December. A basket of 35 commonly bought items cost £83.33 last month, up from £83.18 in November, according to the website mySupermarket. It was still 3% cheaper than in December 2015.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza