In July 2008 we saw petrol hit a massive 119.7p. Back then, one British Pound would buy you two US Dollars. Today we expect the average price of one litre of Unleaded to have hit £1.20 (if you round it to two decimal places it’s actually already happened but to be precise it was 119.96p yesterday) and today’s figures will be available tomorrow around 12pm.
During the financial crisis the UK has fared a lot worse with our currency weakening so much that today you can only get one and a half US dollars for every pound.
This more than any other factor has caused higher pump prices over the past few years. We have seen fuel duty rises too but the impact of the exchange rate has been the single largest cause of rising pump prices lately.
The second biggest culprit is oil prices and things are looking set to get worse with them starting to rise again and with Brent Crude at around $86 a barrel an 18 month high.
Because the exchange rate is so important, the biggest threat to the price we pay at the pumps in the short term is actually what the financial markets make of the election. If they are worried about a hung parliament or the plans to reduce the deficit then the UK could have its credit rating downgraded.
Were this to happen and the UK to lose its coveted AAA credit rating, then the money we are borrowing as a country will be seen as higher risk and the value of the pound in our pockets could plummet to new lows.
With the price of oil on the rise as well we could even see the prices at the pumps hitting a massive £1.50 this summer!
So we wanted to ask our members how is this affecting your lives? Does it feel worse now compared to July 2008? Are you driving less? Are you getting used to higher prices? Have you lost your job because of rising prices? Please tell us your experiences below.