Oil prices at record highs; soaring commodity values pushing up consumer costs; an economic slowdown driven by turbulence in financial markets. In the 1970s, the result was stagflation: a high level of inflation that took years to drive down and created mass unemployment. Today, politicians and central bankers are struggling to find the right policy mix to avoid a rerun of the 1970s oil crises – as rising fuel prices stretch household budgets and squeeze business profits.

This week’s rise, to touch $135 (£68, €86) a barrel, means the dollar price of crude has more than doubled in a year and stands about 15 per cent above its 1979 peak even after adjusting for inflation. The unremitting increase is placing entire sectors, such as airlines and carmakers, under severe strain, while economists and central bankers fear that it will simultaneously slow economic expansion and raise inflation.