Oil shock is main risk to growth, says rate-setter

The latest recruit to the Bank of England's monetary policy committee, David Walton, said yesterday that higher oil prices and a weaker labour market would dampen consumer demand for the rest of the year.

Delivering his first speech as a member of the MPC, he said that although higher oil prices had pushed up inflation, the rise had to be kept in perspective. Oil remained a big uncertainty for growth and inflation, he said. "The shock from oil prices seems larger and more permanent than expected ... High oil prices act like a tax, transferring money from consumers to oil producers."