The prime minister has revealed that he has spoken to oil producing countries about the impact of soaring oil prices.

His intervention came amid inflationary fears as crude oil prices hit a 14 year high.

Tony Blair said he was taking "a very keen interest" in the oil price and added: "There has been a significant spike in demand but this is something obviously we discuss with allies and partners and the oil-producing countries."

The Bank of England, meanwhile, yesterday announced a further rise in interest rates.

Inflationary pressures, coupled with a rise in pay awards, were two factors which influenced the Bank's decision.

Economists expect consumers to feel a squeeze as a result of combined increases in mortgage payments and the surge in oil prices.