On commodities

Commodity price increases are preoccupying most economists. This is hardly surprising since the pri...

Commodity price increases are preoccupying most economists. This is hardly surprising since the price of crude broke through $130 per barrel in May, which is remarkable when you consider that the price fell to under $10 in 1998. Oil price increases, and increases in the prices of other soft and hard commodities, are causing inflation. So far, this has been manageable, but if they persist there is a danger that the "anchoring" of consumer expectations will become dislodged, resulting in the expectation of further price increases and a commensurate demand for higher salaries. The UK G...