Gas Prices Hit Record Highs! Inflation Will Keep Central Banks Cautious

March 5, 2008

Gas prices hit a record high today as crude oil futures climbed to $104 a barrel. Just take a look at the headlines in google news today! According to a local news station in California, the the Americo gas station in Gorda, just south of Big Sur is selling premium unleaded gas for $5.39 a gallon. If you can do without premium regular’s a relative bargain at $5.19.

Ouch.

For the European Central Bank and the Bank of England tomorrow, the continual rise in commodity prices should keep both central banks cautious. The combination of higher inflationary pressures and steady growth gives Trichet the flexibility to keep his hawkish bias intact. As for the BoE, interest rates will remain on hold with the statement talking about the risks to both growth and inflation.

Posted in Bank of England, ECB, Inflation, Oil, Trichet, gas prices