Most models that predict the effect of rising oil prices on economic output have always struck me as fairly meaningless. To say that for every $10 the price increases, 0.5 per cent gets knocked off global GDP, doesn’t tell you much – what matters is the speed with which prices rise and the time they stay high. The damage to confidence caused by a fast-rising oil price tends to have a much greater impact on demand, particularly in the US, where the price of petrol is a key determinant of overall spending.