Greasing the inflationary skids

Oil prices are no longer a source of disinflationary pressure. In January 2007, the price of Brent crude was down 20% from the level at the beginning of 2006. But at $70 a barrel, the oil price is up by a third since then, and the same as this time last year. The rate of oil price inflation could easily turn positive. On the demand side, global growth remains strong, despite signs of a slowdown in the US. Oil supply is fragile. Nigeria, where rebels have disrupted the flow of exports, isn’t the ...