Wade: Commodity prices will hinder global recovery

Schroders' chief economist Keith Wade says higher commodity prices are hampering economic growth as soaring oil and food costs take their toll on consumers.

The pace of recovery has slowed, he says, as higher commodity prices mean lower disposable income for consumers. "In previous recoveries, commodity price weakness provided an important offset to economic weakness, in effect acting like a tax cut to consumers as lower food and energy prices left households with more to spend on other items," says Wade. "However, in this recovery the effect has been reduced as strength outside the OECD has supported commodities." Despite going through the greatest recession in the post-war era, Wade says, commodity prices have come back strongly due ...