Having kindly picked me up from Heathrow Airport just before Christmas, my brother pulled into a petrol station to fill up his car. Having seen that the petrol price had in fact gone down from an outrageous £1.30 to a less punishing £1.22 per litre he audibly exhaled with relief. The pound in his pocket going further is a respite that most of us can appreciate.
Approximately 400 miles away in Frankfurt, the same fact caused Mario Draghi to inhale with despair. A high oil/petrol price is an important cause of inflation. As President of the European Central Bank, he must have inflation no matter what. But how to cause it? Continue reading