Rolling coverage of the latest economic and financial news, as the UK’s supply chain crisis continues
- Intro: More queues and shortages at petrol stations this morning
- Brent crude hits $80 per barrel, first time in three years
- Boris Johnson puts army on standby amid fuel supply crisis
- Health workers should be given priority access to fuel in UK, says senior doctor
Tom Pugh, UK economist at RSM, says the fuel shortages won’t cause much damage to the economy — as long as they are resolved quickly.
But should they extend beyond this week, growth could be hit, he writes:
The well-publicised fuel shortages, which have seen 90% of petrol stations running out of fuel and hours-long queues for those that haven’t, probably won’t make much of a difference to the economy if they end this week as is widely expected.
But if the pumps stay dry for much longer, then the impact of people unable to go about their work and daily lives may join labour shortages, soaring energy prices and a lack of shipping containers as another drag on the economy.
Before the pandemic, about 50% of workers drove to work. That figure may be a bit lower now due to homeworking, but a large part of the workforce will still need fuel to get to work.
What’s more, a shortage of fuel for trucks and delivery vans risks exacerbating the shortage of goods which has been hampering the economic recovery. This will inevitably be a drag on GDP growth in September compared to if there were no shortages.
There is also some evidence that some petrol stations are putting up prices in response to the surge in demand.
Given that motor fuel makes up around 2.7% of the CPI basket, a 10p per litre increase in the price of fuel would add about 0.02 percentage points to inflation in September. This doesn’t sound like a lot, but when inflation is already above 3% and rising it will add to consumers’ misery.
Related: UK fuel prices hit eight-year high as petrol stations run dry
Irn Bru maker AG Barr has revealed that the UK’s HGV and supply chain issues have made it harder to deliver its drinks.
In its latest financial results, AG Barr says it is seeing a pick-up in supply chain issues:
In recent weeks we have seen increased challenges across the UK road haulage fleet, associated in part with the COVID-19 pandemic, impacting customer deliveries and inbound materials.
In addition, the risks associated with the wider labour pool and the current COVID-19 pandemic response are areas we continue to monitor closely.
Irn Bru maker AG Barr has revealed it is struggling to make deliveries of its drinks due to the HGV and supply chain issues #HeartNews pic.twitter.com/egTP25RfaJ
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