Oil prices hit $100 for the first time since May

"More expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and ultimately feeding through into the price of food and other goods," said Jonathan Raymond, investment manager at Quilter Cheviot."This creates another headache for central banks as they continue their battle against inflation. "If energy prices remain elevated, policymakers may come under pressure to keep interest rates higher for longer or even raise them. This would come as a blow to mortgage holders and borrowers already feeling the strain."The England" class="entity-link entity-organization" data-entity-id="2477" data-entity-type="organization">Bank of England, which sets UK interest rates, has held them at 3.75% in its last four meetings.Paul Dales, chief UK economist at Capital Economics, said he believed the Bank will "almost certainly" hold them again. But he said analysts still expected that interest rates could be cut next year if energy price rises ease.Kevin Warsh, the newly-appointed chair of the US Federal Reserve, last week told Congress that the central bank had "no tolerance to persistently elevated inflation".US President Donald Trump had pushed Warsh's predecessor, Jerome Powell, to cut interest rates. Trump has made it clear he expects Warsh to fulfil his demand for reductions in borrowing costs for Americans.