With the recent terrorist attacks in Saudi Arabia, oil prices are on a constant rise. This will obviously hike the price of petrol.
Petrol prices have been rising and are not expected to slow, especially if the terror attacks continue. With prices rising, the rate of inflation in the UK will be affected and could mean interest rates being increased by the Bank of England.
Our View
If interest rates do have to rise to combat an increase in inflation, it could only be a temporary measure. But, the Government's inflation target is already exceeded with interest rates at the current level. This could mean a higher than expected hike in rates at the next review.
If the terrorist attacks are controlled in Saudi, oil prices should fall and lower fuel prices. But, it depends how long it takes.
We would advise people to prepare for a rise in interest rates - and if it doesn't happen, you'll have some extra cash to spend!