Oil Price Threatens US Economy

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Analysts say that a price rise above $80 is inevitable, raising concerns about the effect of energy costs on inflation.

Higher oil prices drive up the costs for businesses who pass those increases on to customers. And with the price of petrol at the pump close to $3 a gallon, it is feared that higher fuel bills will begin to dent consumer spending.

Mr Bodman said that the high oil prices had inflicted only a "modest" impact on the economy but he was unsure that this was sustainable.

"I am concerned that where we are operating, in the ranges that we're talking about now," Mr Bodman said.

"I am concerned for each uptick (in price)."

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