I think Oil and biofuel are going to cause inflation to rise

[steve64]

Dear Stephen ,
First we had soaring oil prices. Then gas and electricity prices went haywire. More recently, Bank of England governor Mervyn King has voiced concerns that the supply of cheap goods from China is being endangered by soaring wage inflation in the rapidly-industrialising country.
But now the Bank has yet another inflation worry - the price of food.
The heat wave experienced across the world this summer has battered harvests, driving up the price of sugar, wheat, fruit, and orange juice, while freak rain storms in Vietnam have been blamed for coffee prices hitting a seven-year high.
And the bad news for both consumers and Mr King is that the supermarkets aren‘t prepared to take the cost increases on the chin anymore…

With prices soaring in all areas of their business - from wage costs, to fuel costs, to lighting, heating and rates for their stores - it’s no surprise that supermarkets are trying to pass on rising food costs to their customers.
According to the British Retail Consortium, the price of food has risen in five of the past seven months, even while the price of non-food items has kept falling. Even the price of beef is now at levels not seen since before the BSE crisis in 1996, rising 3.1% in the past year.
According to trade magazine The Grocer, T***o has hiked the price of lettuce by 10.9%, smoked bacon by 13% and milk by 11% in just the past three months. The FT said: “Analysts believe that the latest round of price rises could signal the end of a period of aggressive competition among supermarkets as retailers act to restore profit margins and respond to rising costs.â€Â