Last weekend the USA went crazy as petrol there peaked at a new high of $4.61/gallon. Here is the maths: a US Gallon is 3.785 Litres and the US Dollar is about £1.60. So by our reckoning $4.61/gall is £0.76/litre (approximately half the cost of UK petrol, the UK petrol equivalent there would be $8.41/gallon.) It lead to James Hamilton, Professor of Economics at the University of California (well known for work on the relationship between oil prices and economic growth) to ask: “will this scuttle economic growth? He concluded: “no”. Why? Regardless of the media storm they have been there before – in 2008. The US consumer is no longer shocked. Life will go on, and if it didn’t we would seriously have to ask why. Their petrol is really, really cheap. But is that a good thing? Are they prepared for what is to come? Continue reading →