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Diesel price could drive up cost of living, experts warn

14 October, 09
Rising diesel costs are likely to mean that the current low cost of living is short-lived, experts have warned.

The AA revealed that the cost of fuel could increase by 2.39p per litre from the current average of 107.35p.

It noted that the fuel duty increase next April will add at least 3.37p to the cost of fuel, reports the Daily Express.

The publication stated that the rise in diesel costs could mean September's five-month low in consumer price inflation of just one per cent will not last for long.

"A looming VAT increase followed by a fuel duty hike mean low inflation will be short-lived," it stated.

Indeed, Jonathan Loynes, chief European economist for Capital Economics, claimed VAT is likely to rise above its two per cent target in December 2009 or in the first month of 2010.

This comes after a uSwitch report indicated that the price of diesel in the UK is the highest in Europe. ADNFCR-2675-ID-19408850-ADNFCR

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Diesel price could drive up cost of living, experts warn