Higher fuel costs leading to inflation
Hurricane Katrina has far reaching knock-on effects in economies outside the USA, owing to the fact that damage caused to the US oil refining industries,
has pushed petrol and diesel prices in the UK at a time when prices were already rising due to world demand. The UK is particularly hard hit due to the
very high tax on petrol, the highest in Europe. A litre of petrol now costs at least £1 (£4.50 a gallon).
Oil price increases would probably cause inflation
to creep higher in September, after the August figure rose 2.4%, the highest level since current records began eight years ago. House prices rose
unexpectedly by 1.6% in August according to the Halifax Bank of Scotland. The average house price in August was £166,000. With higher inflation, further calls for interest rate cuts seem unlikely to be met as inflation is at a higher level than the target set by the Chancellor of the Exchequer.
Consumer spending keeps declining
The timber trade remains pessimistic about the future as its products are all very dependant on transport costs from source to site. B&Q, the DIY chain, is considering closing 22 of its stores, including up to six mega stores. Growth is predicted to be lower while borrowing will be much higher than forecast for 2005. Some economists point to possibly higher taxes next year.
General spending continues to decline as seen in the
annual reports of a number of key companies in the
last few weeks. However, house building activity
seems to be holding up with new orders at a
reasonable level, but overall the economy continues
to be fragile.
Log prices in the UK
Sawnwood prices in the UK
Plywood and MDF in the UK
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