Sooner or later people will start to buy less which will mean that more medium and small business will close their doors forever. It is even possible that people will look at these petrol prices and wonder if it is still worth their while going to work, after they take into account wages which may have also been cut. Some may feel that they would be just as well living on benefits rather than working. Surely the government must be aware of this snowball effect which will create more unemployment. At the same time we read of the tens of billions of pounds worth of profit the petrol companies continue to make. In times of austerity are such huge profits necessary?
Petrol prices rose to £1.36. For many cars are not a luxury any more but a necessity. Chancellor George Osborne already stated that there will not be any offer of help, as far as UK fuel prices go. He has also already hinted that there will not be any fuel tax reduction in the Budget this month. He pointed out that he has already frozen or cut fuel prices twice. So, what stops him from doing it again?
The coalition is always pointing out they would bring down unemployment and improve the economy if they could. Diesel and petrol prices are a very fundamental cost which will escalate right across the market. Labour stated that Chancellor Osborne could reduce the fuel cost by cutting the price of VAT at petrol stations. The Shadow Transport Minister John Woodcock said: "A temporary cut in VAT, which is part of Labour's five point plan for jobs and growth, would mean a drop of prices and make a difference to families."All of this really makes you wonder if the government does not realize that they are working towards inflation. All of their "wrong policies" will lead to an increase in inflation. Perhaps they, for some reason, are purposely working towards a hike in inflation. All this does not make sense any more and certainly will not improve the economy.