Over the weekend and into this week, there have been fuel protests in France, Belgium, Germany and Australia.

Yesterday in France, French truckers blocked the main ring-road bringing traffic to a halt. Their complaint is that they have to pay more tax on fuel than truckers do in some neighboring countries. A further hundred vehicles blocked the A1 near Lille and there were other blockades on roads leading from channel ports. Surely the French truckers can’t be under the impression that British truckers are paying less fuel duty?

In Belgium a Total fuel depot was blockaded by transport unionists in protest at the high cost of living. The Belgian unions are now warning of further actions. The reported inflation figure in Belgium is 5.8%.

In Germany, an unemployed man drove his BMW onto a patch of grass in front of the Exhibition centre in Frankfurt and set fire to it stating that he could no longer afford his car as the fuel was to expensive. One would assume he used something other than petrol to accelerate the fire

Finally, 100 truckers in Sydney, Australia [today?] staged a go-slow on key routes in one of the first reported major protests at fuel prices in the country. The whinging Aussies are having to pay about 154.9AUD per litre for petrol. That’s abotu 0.74GBP or just over half the price in the United Kingdom!

Halifax’s Standard Variable Mortgage (SVR) interest rate now stands at 7.1%

The Halifax rate is often quoted as a benchmark for the UK and this now illustrates the widening disjunction between mortgage interest rates and the Bank of England base rate at 5%

Fixed rate mortgages are now averaging 6.75% for a 2 year fix and 6.72% for a five year fix. To my mind this indicates that the banks are not projecting much easing in the medium/long term either.

In the mean time, Halifax’s regular saver rate hit 10% for 12 months.

Unfortunately, it is rather hard to track SVR historically for individual banks. If anyone has historic data series for any bank’s rates, please let me know on the comments form below.

I was out and about on two occasions this evening, the first time on foot, the second on my push bike.

It was frankly eerie. At the end of the evening rush hour, walking along a side road about 200 meters from a main artery on the other side of some buildings, the usual familiar background ‘hiss’ of tyres on tarmac wasn’t present. Certainly there was traffic but nowhere near as much as usual.

Later when I took to the road by bicycle, I was even more surprised as the general absense of heavy traffic. I found my self travelling along one stretch of a normally busy A road for a minute or two where I was the only vehicle moving. I also encountered a higher than normal number of other cyclists and a few walkers. Don’t get me wrong, I’m no tree hugger and indeed I own a car but it hasn’t been off the drive in days; the fuel is just too expensive.

Fuel in the UK is now £1.17/litre for petrol or £1.30/litre for diesel (The equivalent of US $8.52 / US Gallon)

There was still a small contingent of lunatics on the road it seemed though. First there was the original ‘boy racers’ in barried-up shopping trollies doing their level best to anhiallate themselves and others and the inevitable Evo VII crowd burning more fuel per inch than anyone else on the road. Clearly the credit crunch hasn’t quite caught up with these demographics yet.

One thing is for sure, the UK’s economy can’t survive if all the motorists are priced off the roads.

Retail sales for the UK grew by 3.5% in May according to figures published by the ONS. That’s would be 8.1% annualised; nothing to be sniffed at. This runs contrary to the general picture of a slowing economy with tightening credit and anecdotal evidence of the same.

Many explanations could be given for the increase in retail spending. Many have suggested that downturns tend to have ‘one last hurrah’ rather like the ‘dead cat bounce’ of financial markets. There is also the possibility that heavy discounting has prompted greater sales numbers. Personally, I’ve seen something of the opposite; lowering retail sales, quieter high streets and less traffic on the roads. Others I’ve spoken to seem to be in agreement on this.

So, wherever the 3.5% extra retails sales were happening, apparently it wasn’t near me.

The ‘analysts’ quoted in today’s news stories point out that the Bank of England is more likely than ever to raise interest rates in an attempt to curb UK inflation which would curtail retail spending in their view. I’d counter that point with the fact that at least bank mortgage rates have been decoupled from the base-rate since about November 2007 so this should have less of an immediate effect for those indebted while preserving some of the buying power of those with savings.

Update: I just caught on VHForex that the last time there was such a big unexpected spike in retail sales (3.2%) it was March 1991, just before the UK fell into recession.

I have an association with a fairly busy retail ecommerce site in the UK and in the last few weeks I’ve noticed a very significant drop-off in the number of Polish ’sounding’ names given by customers placing orders. The British, Middle Eastern and East Asian sounding names are still there but the once familiar Polish or former Eastern Block names have all but gone.

Certainly, this is not a scientific method as many British families inherited Polish surnames after World War II but is this an indicator that Polish immigrants are leaving the UK? It could, of course, be the case that they are still here but they are not buying as part of a larger economic down turn. However, I suspect any economic downturn would see Polish workers leaving to take advantage of the now increasing power of their home economy.

I would therefore be concerned that disappearing ex eastern-bloc workforce could be a major pointer to the wider health of the UK economy.

The UK’s official inflation figure (CPI) is now 3.3%, 1.3% above the target of 2%. The governor of the Bank of England has exchanged the mandatory letter of explanation with the chancellor of the exchequer.

The bank’s governor, Merv King, cites rapid increases in the price of food and fuel as to blame. The Bank of England believes that UK inflation could now exceed 4% in December. However, the BoE predicted last May that the CPI figure for this April would be circa 2% with the upper bounds of probability at about 2.6% and yet the real figure turned out at 3%

Now we have the inflation projection for May 08 onward, it makes you wonder if the upper bounds of this projection are still off low. The Bank of England has not openly committed to interest rate rises to head off inflation and as we continue to import inflationary goods, it’s hard to see how inflation is going to be brought under control in such a short period of time.

People I’ve spoken to as of this morning have generally been saying that the current CPI figure of 3% is unrealistic with real UK inflation being in the region of 10% or more. Just to look at the leaping prices on supermarket shelves give an indication of this. It seems to be the inexplicable selection of products in the Consumer Price Index basket which holds the figure artificially low.

The ONS also reports that the Retail Price Index has gone up from 4% to 4.3%

Bank of England Inflation Report May 08[PDF]

ONS UK Inflation Report May 08[PDF]