Oh great. This is about the last thing any of us need now so hopefully they're all completely wrong about this. However, it is rather strange to see oil prices so high during a recession. They are obviously down from the $150 high, but even around $70 sounds very excessive when looking at how deep the recession has been.
There were similar warnings from the oil industry itself yesterday. Christophe de Margerie, chief executive of the French energy giant Total, said oil is set to move back above $100 and warned that if recession-hit oil producers continue to delay investment the world faces shortages by 2015.
Mr Sentance's warning also echoes remarks from the Bank Governor, Mervyn King, last week. He described commodity prices as one of the "headwinds" facing the economy, not least because of recent growth in Asia. "Because their growth is more energy-intensive than in other parts of the world so we may see a pick-up in commodity prices," Mr King said. "[So] recovery may be more protracted than we might otherwise have thought."
