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Oil prices at record highs, soaring commodity values pushing up consumer costs, and an economic slowdown driven by turbulence in financial markets...
In the 1970s, the result was stagflation. The high level of inflation took years to drive down and created mass unemployment.
Today, politicians and central bankers are struggling to find the right policy mix to avoid a rerun of the 1970s crises, as rising fuel prices stretch household budgets and squeeze business profits.
Last week's oil price rise - to touch $135 a barrel - means the dollar price of crude has more than doubled in a year and stands about 15 per cent above its 1979 peak, even after adjusting for inflation.
The unremitting increase is placing entire sectors, such as airlines and car makers, under severe strain, while economists and central bankers believe that it will simultaneously slow economic expansion and raise inflation.
Swelling fuel bills have sent US airlines to the brink of insolvency. The relentless rise in fuel prices has wiped out the earnings of all but a handful of carriers, forcing many to slash services.
Last week, American Airlines announced the cancellation of more than one in 10 US flights, axing thousands of jobs and charging most passengers $15 to check in a single item of luggage.
European airlines often fly more modern fleets, and leisure airlines reckon that most people will not sacrifice their annual summer holiday. But Air France-KLM said this week that its operating profit could fall by a third as a result of fuel prices, and that fares would have to rise.
Willie Walsh, chief executive of British Airways, has warned investors that his airline could ground some aircraft after the summer to reduce capacity - and even cut unprofitable routes. Operating profits could be wiped out if the oil price remained above $120 a barrel, he said. "At $125 a barrel oil, we are in uncharted territory."
Road hauliers are also feeling the pinch, particularly in countries such as the UK, where fuel taxes are high and often rise each year.
Britain's Road Haulage Association (RHA) says the cost of filling up a typical articulated lorry has risen from £35,000 a year to more than £50,000 in only 12 months. "The haulage industry cannot possibly absorb the impact of surging oil prices," said Roger King, RHA chief executive.
Many business sectors that are not significant oil users are suffering because of the impact of crude prices on energy costs.
The price of gas, used to generate power, is often linked implicitly or explicitly to the oil price, while record coal prices and bottlenecks in shipping and port capacity place limits on fuel substitution.
Utilities hit by the energy costs are coming under political pressure in many countries to delay price rises.
Worst hit are intensive energy users such as steelmakers, where energy accounts for a quarter of costs, and aluminium smelters, where the figure is as high as 40 per cent.
While all producers are affected by the global price increases, some are being hit harder because of local variations in tax and regulation. The chemicals industry has also been hard hit, not only as an intensive energy user, but because it uses hydrocarbons for its products.
The impact on manufacturers also depends on their ability to pass higher costs on to customers.
Michelin issued a profit warning last month after saying that high prices for oil and rubber would cost it 200 million euros ($316 million) this year.
Producers of large, gas-guzzling cars are suffering. Sales of luxury four-wheel drives have nearly halved in France and Spain this year. Troubled Detroit car makers are also suffering, with analysts predicting that 2008 will be the worst year the US car market has seen since 1991.
Fred Smith, chief executive of FedEx, the package-delivery pioneer, told the Financial Times recently that high fuel prices would prompt more companies to buy hybrid vehicles, look for organic fuels and seek other alternatives.
"Significantly more companies are passing on rising prices now," said Steve Radley, chief economist of the EEF, which represents manufacturers in the UK. "But they can't pass on the full amount, so margins are being squeezed."
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