To the extent that higher oil prices push up headline inflation and so risk pushing wages higher, the Fed is likely to have to raise interest rates by more than many people now expect.

ECONOMIST: Fuelling inflation?

Wouldn't higher interest rates push up sterling and make exporters suffer even more?

ECONOMIST: The economy

This is the basis of the Balassa-Samuelson theory which holds that average prices will be higher in countries with higher productivity (ie, high GDP per head), because higher wages will push up prices in labour-intensive goods and services.

ECONOMIST: Economics focus: Burger-thy-neighbour policies | The