Oil at $110 a barrel pushes up household costs from food to mortgages
Oil reached a five-month high of $110 a barrel, while gas prices in Asia and Europe hit their highest levels since December 2022, Reuters reports. Higher energy costs are feeding through to transport, heating, food packaging and borrowing: UK inflation rose more than expected in August, and the Reserve Bank of Australia raised its cash rate to a 15-year high last month.
Bottom line — The UN Food and Agriculture Organization expects global food inflation to accelerate and persist well into 2027.
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Reuters reports that average British diesel reached €2.30 (£2.00) a litre this month, a first.
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EnergyUK estimates British households could face heating bills 10% higher year on year this quarter.
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The Reserve Bank of Australia’s rate increase pushed up the mostly variable housing loan rates used in the country.
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Reuters calculates that on an average Australian mortgage of €444,000 (A$731,000) over 30 years, a rise in rates from 5.5% to 6.2% lifts annual repayments by about €2,370 (A$3,900).
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In the US, 30-year mortgage rates rose from about 6.1% to 7.5%, while purchase activity weakened, Reuters reports.
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The UN Food and Agriculture Organization links the outlook for food inflation to shipping disruption and higher fertiliser costs.