Britain has been far better placed to withstand the doubling of oil prices since the end of 2003 than it was in the crises of 1973/74, 1979/80 and 1990, according to David Walton, the newest recruit to the Bank of England's interest-setting Monetary Policy Committee.
But speaking to a forum of the University of Warwick Graduates Association he took care not to speculate on the eventual outcome.
"We do not know how large the shock will be, ultimately," Mr Walton said.
"After dipping during the final months of last year, oil prices have been rising again in recent weeks. Wholesale gas prices have also risen sharply.
"At all times, the commit-tee's focus will be on achieving the appropriate balance between demand and supply to keep consumer price inflation on track to hit the Government's target of two per cent."
So far the outcome had been relatively benign.
Examining the reasons, he noted that the size and nature of this shock had been different, taking longer to unfold and arising from strong global demand for oil, not Middle Eastern wars.
This time inflation had been well under control beforehand and there had been little sign of higher wage demand since - in marked contrast to the 1970s. Finally, expectations of inflation were "anchored" by the two per cent target, enabling the Bank's committee to react flexibly.
His comments came as cautious manufacturing companies scaled back their capital investment by 6.9 per cent between the third and fourth quarters of last year.
That reduced the total for all manufacturing to £3.278 billion.
Overall, National Statistics estimated provisionally that business investment, including the public sector, was £28.213 billion, one per cent lower than in the third quarter and 0.3 per cent higher than in the fourth quarter of 2004. ..SUPL: