mpc.theyserveforyou.com

mpc: 11 The price of crude oil had risen further during the month. In dollar terms it was now at its highest levels since 1990, and in the latest month it had risen when measured in terms of other currencies too: the sterling price had risen by some 16% since the Committee's April meeting. Several factors seemed to underlie this rise: the general global upturn in activity; the low level of private inventories in the United States; particularly buoyant demand from China; market speculation that OPEC would raise its target price range; and political events in the Middle East. These factors suggested that the balance of demand for and supply of oil might be shifting, so that the rise in oil prices might persist. Oil futures prices for a year ahead were 15% higher in dollar terms than at the time of the February Inflation Report. Other commodity prices had on average risen modestly in sterling terms since the Committee's April meeting. The implications for monetary policy of higher oil and commodity prices depended on whether inflation expectations overall remained well anchored.