Inflation in the UK: UK gasoline prices are soaring on a combination of increased fuel taxes and higher VAT (value added tax, for those Americans who don’t know—but should get to know, since a lot of people are saying an American VAT might be one way to close the budget deficit).
Source here, (but discount a trivial arithmetic error in the headline).
Compare that to current average prices of gasoline in the US of $3.00 to $3.20, source here—less than half the UK’s fuel prices.
This goes back to UK inflation. Pundits will claim that the UK puts a lot more duties and tarrifs and taxes on gasoline that the United States does—which is true: See the chart.
|Breakdown of UK gasoline prices|
as of 2008; VAT now 20%.
Perhaps the fact that the United States skirted the Asian Crisis in the late Nineties pretty much without a nick or scratch has given Americans a false sense of confidence that what happens elsewhere does not affect them here?
Because rising commodity prices will affect everybody—without exception. And we’re going to be seeing it this winter.