Concern rise over possible US 'stagflation'

The US have been bearish on growth based on the consumer slowdown and the sub-prime crisis, yet the risks of a spillover to the rest of the economy have been downplayed and, as yet, not been reflected in world market levels. Nevertheless, today's economic environment of rising oil prices and a crisis in the Middle East, combined with an inefficient US president, is reminiscent of the late 1970's which saw the US enter into an extended period of stagflation. Oil prices have almost doubled since April 2004 and the US Federal Reserve chairman Ben Bernanke recently warned that inflation remai...