You All Missed It By The Look Of Things

[AvidFan]

Today on the new Sunday AM show at 9:00am BBC1...

GB was on. He managed to get in the line "Whenever oil prices have run high, it's caused a recession in the UK..."

And you all missed it.

How's that for buck-passing ??

[200p]

Hey its sunday and we re bleary eyed!

So GB saying we might be heading towards a bust!?

[apom]

Today on the new Sunday AM show at 9:00am BBC1...

GB was on.  He managed to get in the line "Whenever oil prices have run high, it's caused a recession in the UK..."

And you all missed it.

How's that for buck-passing ??

<{POST_SNAPBACK}>

that was it..

an admission that the bust is to happen..

and to be honest hight fuel prices will add just enough to personal costs for to push it over the edge..

Brown admits to recession.. atarts bottom covering..

batten down the hatches..

and remember.. it is better to have a small loan at high interest rates then a large loan at low..

Those that didn't realise that will get burned.

[DEATH]

Didn't he blame OPEC for the high price?

Petrol at the station is only 25p a litre without the tax, so who's really to blame?

[200p]

Course its the oil companies. 100%

They always report record profits at the end of the financial year

Whos going to budge though? Taxes or Oil company profits? Or are we going to just have to cough up like good citizens.

[BoredTrainBuilder]

Also in the Observer today "as the world nears the crunch point of peak oil production" (P2) in an article in connection with Brown and his recent pronouncements on oil. Not stated as a theory or possibility but as accepted fact.

Why then is he continuing to freeze duty on fuel?

[Gooner]

Course its the oil companies. 100%

They always report record profits at the end of the financial year 

Whos going to budge though? Taxes or Oil company profits? Or are we going to just have to cough up like good citizens.

<{POST_SNAPBACK}>

Trev - oil companies report record profits when the price of oil is high, but they do not set the oil price - that's open market demand driven. Just to clear up another misconception (fuelled (pun) by the media) ..... Oil companies make their money extracting oil, not refining and selling it as petrol. Most oil companies make more money selling Mars bars and coffees than they do petrol

A final point - BP & Shell make up a significant part of the FTSE and pay large dividends - as a result, they are in virtually everyones pension fund, so we should be all thankful that some british based companies are proping up weak pension pots

[verolution]

i don't disagree there may well be a recession coming, but given our economy these days is 50% city banks + 40% govt non jobs + the rest - I don't really see higher fuel prices having as much of an impact as it did in the past.

[Golden Shower]

i don't disagree there may well be a recession coming, but given our economy these days is 50% city banks + 40% govt non jobs + the rest - I don't really see higher fuel prices having as much of an impact as it did in the past.

<{POST_SNAPBACK}>

Do you have stats to back up 50% city jobs etc? Remeber even banks and insurance companies have to pay extra money for heating and lighting now. Just as the local government are going to have to find the extra money. Also, remember that local government run a range of services and they aren't all desk jockeys.

In a economy which would be considered the US's 5th poorest state (UK equivalent to 5th poorest state in US) I don't think oil/petrol price hikes can be taken lightly.

I have no idea what will really happen but I don't think we are going to escape from this unscathed.

[The Masked Tulip]

I am actually considering putting a bet on a shock Brown resignation from the Cabinet this Autumn.

[ILBB]

He could, of course, just be priming the world for a relaxation of his financial rules and conveniently putting the blame on the oil price spike.

There's no doubt in my mind that he'll have to take some action to stop the UK economy falling into recession, bearing in mind that the rise in oil will see around £300 to £500 added to the average households fuel, electricity and heating bills and that's just the primary effect! I think we may soon find out just how independent the BoE committee really is!

[apom]

No more Boom and Bust and Brown outstrips the GDP with the housing boom...

He needs to be arrested.

am I wrong?

[Smell the Fear]

No more Boom and Bust and Brown outstrips the GDP with the housing boom...

He needs to be arrested.

am I wrong?

<{POST_SNAPBACK}>

He has publicly stated "no more boom and bust" so many times that it will surely be his downfall. A total lack of credibility awaits.....

[Once in a lifetime]

Next news:

Tony Blair to retire; “I’ve done my bit for the country and now it’s time to scarper before the sh*t hits the fan” he was not quoted as saying

[laughing_goat]

I look forward to the day Gordon Brown becomes PM, as he wouldn't be chancellor anymore!

Strangely, he may not be able to do so much damage in the top job. That's not to say he couldn't do any damage.

[farmerdring]

i don't know. brown is clever. if this sunday morning quote by him is correct - and was volunteered from him rather than coaxed by the interviewer - then he has tabled his scape goat and will probably get away with it.

let's face it, to the public he has low CPI, low IR, fat housing capital, record level of employment, 'everyone' is happy despite one or two murmours. the timing is absolutely perfect for an oil shock to supposedly be the singleton cause of wrecking his economic miracle.

whatever his route-to-power (if being chancellor isn't already powerful enough?) plan, i expect it is somewhere between good and foolproof.

he's a clever and powerful man.

some have called him a fool. no way. it's just because we don't know what he knows and do not have his personal vested agenda.

[farmerdring]

Next news:

Tony Blair to retire; “I’ve done my bit for the country and now it’s time to scarper before the sh*t hits the fan” he was not quoted as saying

<{POST_SNAPBACK}>

[Sarah Beeny!]

Peak oil, petrol rationing, no more boom and bust, petrol blockades, house prices never fall, they won't let it happen, spring bounce, new labour and non-productive/non-jobs, £160k a year council 'leaders', public sector final salary pensions, outreach diversity transgender awareness advisor - £40k + car (BMW!), Gordenron Brown, Tony ******* Blair, two jags Prescott (blames global warming for Katrina!!!), et al.

This whole heap of shite will go bust soon and we will blame it on weak, navel gazing woolly hand wringing left/liberal tossers that have spent/sprayed/squandered our wealth on what?

Gordon Brown and Tony Blair should be shot. They have presided over the destruction of the UK and are guilty of WAR on a grand scale.

My post is the result of looking at Blairs holiday snaps smiling and grinning in the sun on a boat and Iraqi's with their legs/arms blown off.

Bring on the crash/downfall/revoloution.

[apom]

I would either consider shooting them a little harsh.. or a little quick.. depending on the moment..

I earn a good salary and I only want a small flat.. a little one bed i can enjoy the rest of my life from..

As it stands I can't even do that..

32 years old, Technical consultant for a software house in Devon..

and I can't buy the smallest place.

not without maxing my mortgage...

£583.33 would be interest only against a one bed flat i saw..

I wouldn't even be paying capital...

insurance on the loan or bills.. council tax...

used to be this flat was aimed at the low earners..

Now I can't buy it myself without lying about the salary I earn..

I think the economy is seeing less spending because house prices in Devon have trebbled.. more then the petrol..

Mr Brown.. Do not P*ss up my back and tell me it is raining.

[malco]

I await with fascinated anticipation the gov's reaction to the fuel protesters. Although the gutless cowards will probably desire to cave in to anarchists as they did last time (and the Labour Party always has done, recall union troubles in the '70s), against that they must fear the loss of tax income. Recession coming and gov spending/borrowing set to soar with falling tax receipts out of a shrinking economy - doesn't leave much manoeuvre in cutting fuel taxes.

My bet is they'll introduce special tax breaks for the killers in the Road Haulage industry (heavy lorries kill 600 people a year in road accidents, most of them in cars - funny how a rail disaster that kills 30 causes repercussions that last for years while the RH industry gets away with more than that every month and nobody lifts a finger!). The RHA are very powerful because British industry is so dependent on road haulage. Whereas the general public are only peripheral to the fuell protesters.

So that's my prediction - the protesters will suddenly go home for no apparent reason because the government will do a sneaky, cowardly little deal with them. How I hate the grinning, sanctimonious, spineless swine who run this government. :angry:

[Once in a lifetime]

For the last two years, he has borrowed his way out of the economic slowdown. But his final headache is that UK government debt has now breached its Maastricht criteria. Humiliatingly for Brown, and with what should have devastating consequences for his and New Labour's self-styled reputation as a sound manager of the people's money, his overdraft limit is reached.

Waiting game over for lame Chancellor

http://news.scotsman.com/opinion.cfm?id=1920642005

[BoredTrainBuilder]

My bet is they'll introduce special tax breaks for the killers in the Road Haulage industry (heavy lorries kill 600 people a year in road accidents, most of them in cars - funny how a rail disaster that kills 30 causes repercussions that last for years while the RH industry gets away with more than that every month and nobody lifts a finger!). The RHA are very powerful because British industry is so dependent on road haulage. Whereas the general public are only peripheral to the fuell protesters.

<{POST_SNAPBACK}>

Malco thanks for raising that little known truth. I'll bet the 60-ton 'road trains' prposed will increase that number: Road Trainhttp://news.bbc.co.uk/1/hi/uk/4235338.stm

Edited September 11, 2005 by BoredTrainBuilder

[Spirit]

Today on the new Sunday AM show at 9:00am BBC1...

GB was on.  He managed to get in the line "Whenever oil prices have run high, it's caused a recession in the UK..."

And you all missed it.

How's that for buck-passing ??

<{POST_SNAPBACK}>

Yes, I saw it, but what he went on to say was that in the past high oil prices have led to recession, but this time its different because of his stable economy and low inflation.

Marr was completely useless and allowed him to keep repeating the same old mantra.

No mention of tax on petrol at all! Marr asked GB about possible action, but GB replied that people were "sensible" and realised that the high prices were due to "global" events. He said this would be resolved as he was speaking to oil producers and asking for "transparency" from suppliers.

:angry:

[CrashConnoisseur]

He managed to get in the line "Whenever oil prices have run high, it's caused a recession in the UK..." [AvidFan]

Also reported in 'Brown blames Opec for fuel crisis':

http://news.bbc.co.uk/1/hi/business/4234788.stm

Acknowledging that the current crisis was as big as the oil shock of the 1970s, ...

This is untrue. The current oil situation is a long way short of being "as big as the oil shock of the 1970s" for the following reasons...

1. Adjusted for Retail Price Inflation oil would need to approach $100 per barrel to match the price seen in the 1970s. Adjusted for average wage inflation or the rise in corporate profits it would need to go much higher to reach comparable levels of affordability.
   
2. One of the main drivers for the rising price of oil has been the fall in the dollar. Oil is sold in dollars. If each dollar is worth less, then more dollars are required to obtain the same value. Consequently the price in UK pounds has gone up far less than it has for consumers who pay in dollars. For a discussion see 'Overlooked factor in oil hike: falling dollar':
   http://www.csmonitor.com/2004/0407/p09s02-coop.html

   Between the end of February 2002 and the end of February 2004, the price of oil in dollars rose by 51 percent (from $20 a barrel in 2002 to more than $35 a barrel today), but it rose by only 4 percent in euros. Over the same two-year period, the US currency plunged from 1.16 euros per dollar to 0.80 euros per dollar. In this situation, it is perfectly rational for foreign suppliers of oil to charge more dollars.
   While remedies such as encouraging more efficient use of energy are good, they won't negate the fact that a declining US dollar is an important cause of the run-up in oil prices.

3. The oil shock of the 1970s was a genuine shock -- OPEC turned off the taps for political reasons and created an acute shortage. At worse, we now have a small supply-demand imbalance (likely to be corrected, at least in the medium term, by demand elasticity and incremental supply increases).
   
4. The UK is still largely self-sufficient (although North Sea output is in decline). In the 1970s almost all UK oil was imported. Consequently rising oil prices now make little difference to the balance of trade.
   
5. As a result of North Sea oil British based companies, such as BP, are now major players in the world market. The oil sector contributes substantial foreign earnings and taxation revenue to the UK economy.
   
6. Since the 1970s the UK economy has moved away from energy intensive manufacturing to services. Each unit of GDP now requires around 40% of the oil that it did back in the 1970s.
   

Petrol at the station is only 25p a litre without the tax, ... [DEATH]

For an average pump price of 91.82p, the pre-tax price is 31.1p per litre (91.82 / 1.175 - 47.1).

He could, of course, just be priming the world for a relaxation of his financial rules and conveniently putting the blame on the oil price spike. [iLBB]

I suspect that's exactly what he's doing. It's possible he was forewarned about the need to raise interest rates by Mervyn King earlier in the weekend, as reported in 'U.K. Chancellor of the Exchequer Gordon Brown said Sunday the fiscal impact of high oil prices for the U.K. would be "effectively neutral".':

http://www.thebusinessonline.com/DJStory.a...0050911DN002344

Brown said he had spoken with Bank of England Governor Mervyn King during the course of the weekend about the inflationary impact of high oil prices in the U.K. Brown said he believed the independent, interest rate-setting central bank would be able to keep inflation under control.

There's no doubt in my mind that he'll have to take some action to stop the UK economy falling into recession, bearing in mind that the rise in oil will see around £300 to £500 added to the average households fuel, electricity and heating bills and that's just the primary effect! [iLBB]

The modest oil price rise seen so far (in pound terms) is unlikely to be the cause of a UK recession. However, the relatively small rise in interest rates that may be needed to counter its inflationary effects is likely to exacerbate a recession caused by the ongoing house price adjustment.

The timing is absolutely perfect for an oil shock to supposedly be the singleton cause of wrecking his economic miracle. [farmerdring]

Indeed. However, the real cause remains the speculative bubble in the housing market which started to deflate last summer -- before UK oil prices even became an issue.

[El_Pirata]

He managed to get in the line "Whenever oil prices have run high, it's caused a recession in the UK..." [AvidFan]

Also reported in 'Brown blames Opec for fuel crisis':

http://news.bbc.co.uk/1/hi/business/4234788.stm

This is untrue. The current oil situation is a long way short of being "as big as the oil shock of the 1970s" for the following reasons...

1. Adjusted for Retail Price Inflation oil would need to approach $100 per barrel to match the price seen in the 1970s. Adjusted for average wage inflation or the rise in corporate profits it would need to go much higher to reach comparable levels of affordability.

2. One of the main drivers for the rising price of oil has been the fall in the dollar. Oil is sold in dollars. If each dollar is worth less, then more dollars are required to obtain the same value. Consequently the price in UK pounds has gone up far less than it has for consumers who pay in dollars. For a discussion see 'Overlooked factor in oil hike: falling dollar':

   http://www.csmonitor.com/2004/0407/p09s02-coop.html

3. The oil shock of the 1970s was a genuine shock -- OPEC turned off the taps for political reasons and created an acute shortage. At worse, we now have a small supply-demand imbalance (likely to be corrected, at least in the medium term, by demand elasticity and incremental supply increases).

4. The UK is still largely self-sufficient (although North Sea output is in decline). In the 1970s almost all UK oil was imported. Consequently rising oil prices now make little difference to the balance of trade.

5. As a result of North Sea oil British based companies, such as BP, are now major players in the world market. The oil sector contributes substantial foreign earnings and taxation revenue to the UK economy.

6. Since the 1970s the UK economy has moved away from energy intensive manufacturing to services. Each unit of GDP now requires around 40% of the oil that it did back in the 1970s.

Petrol at the station is only 25p a litre without the tax, ... [DEATH]

For an average pump price of 91.82p, the pre-tax price is 31.1p per litre (91.82 / 1.175 - 47.1).

He could, of course, just be priming the world for a relaxation of his financial rules and conveniently putting the blame on the oil price spike. [iLBB]

I suspect that's exactly what he's doing. It's possible he was forewarned about the need to raise interest rates by Mervyn King earlier in the weekend, as reported in 'U.K. Chancellor of the Exchequer Gordon Brown said Sunday the fiscal impact of high oil prices for the U.K. would be "effectively neutral".':

http://www.thebusinessonline.com/DJStory.a...0050911DN002344

There's no doubt in my mind that he'll have to take some action to stop the UK economy falling into recession, bearing in mind that the rise in oil will see around £300 to £500 added to the average households fuel, electricity and heating bills and that's just the primary effect! [iLBB]

The modest oil price rise seen so far (in pound terms) is unlikely to be the cause of a UK recession. However, the relatively small rise in interest rates that may be needed to counter its inflationary effects is likely to exacerbate a recession caused by the ongoing house price adjustment.

The timing is absolutely perfect for an oil shock to supposedly be the singleton cause of wrecking his economic miracle. [farmerdring]

Indeed. However, the real cause remains the speculative bubble in the housing market which started to deflate last summer -- before UK oil prices even became an issue.

<{POST_SNAPBACK}>

Excellent analysis, Jeff, I agree with you on every point there.

What particularly annoyed me about Brown this morning was his attempt to lay the blame with Opec. With the exception of Saudi Arabia, Opec countries are producing pretty much at full capacity. The incremental supplies Saudi Arabia has (heavy sours) are not what the market wants, especially since Katrina took a lot of heavy sour refining capacity out.

Yes there are degrees of dovish-ness and hawkish-ness over price targets within Opec (Venezuela is particularly hawkish for example as Chavez needs the cash for social spending), but Opec is not a conspiracy to screw the developed world. These guys are not idiots, they know it is not in their interest to tank the world economy.

If Brown really wants to sort the situation out, he will make some big incentives for oil companies to build some new refineries, because that is where the real problem is. But as far as I can tell neither he nor anyone else in the government has done anything towards this.

A refinery is a horrible big smelly polluting thing, and for a politician promoting the building of new refineries is not a great career move. You'll have Greenpeace etc all over you for years for a start. But someone needs to have the balls to get up and say, if you want your current way of life to continue, if you want some degree of energy security, these are the sacrifices we have to make. Rather than just passing the buck to Opec (which has even offered to fund new refineries in the US).