Pump prices predicted to rise by up to two pence

The value of the pound is likely to result in higher prices at the pump despite a drop in the world crude price following the referendum result, says the RAC.

RAC Fuel Watch spokesman Pete Williams said: “It is too early to tell what the implications are in the mid to long term but it is likely motorists will see some volatility in the price of fuel on UK forecourts in the coming weeks.

"While the cost of crude has dropped as markets react to fears of a global economic slowdown, the fall in the value of the pound to levels not seen since 1985 means that retailers are today facing an increase in the wholesale price of around 1.5 pence, which will very likely be passed on to motorists at the pump.”

The pound fell further against the dollar today (Monday) after Friday's record one-day loss. The FTSE 100 index was also down 0.4% at 6,111.42. The index fell by more than 8% at one point on Friday before recovering some ground to close 3.2% lower.

Sterling was trading at $1.3460 this morning, down 1.8%, although this was above the low hit on Friday of $1.3228, which was the pound's biggest one-day fall against the dollar.

The FTSE 250 index, which mostly contains companies that are more UK-focused, was down 2.2%.

Motoring organisation the AA has taken a similar view to the RAC. It said: "Assuming that current market conditions persist over the next 10 to 14 days, the price of petrol at some fuel stations might be expected to rise by 2.25p a litre, or £1.25 a tank."

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