Could the price of oil derail the UK economic recovery?
As the UK economy continues to give conflicting signals to investors and consumers around the country the Independent Energy Agency (IEA) has today issued a report highlighting concerns that the price of oil could impact upon the worldwide economic recovery. Interestingly the IEA has found no evidence of increased domestic demand for oil in the short to medium term amid suggestions that speculators are pushing the price higher and higher in the expectation that the worldwide economy will recover very soon.
As the price of oil moves towards $70 a barrel, from a December low of $30, there are concerns that we could see the price spike yet higher. This is a very delicate situation because oil, and fuel in particular, has such a significant impact on the cost of many goods and services in the UK and around the world. If the price of oil continues to rise it is almost inevitable that corporate profitability would come under pressure, more companies would need to slash their workforce and net debt in corporate UK would continue to rise.
A return to a weaker UK economy would not only impact on investment and UK businesses but also has the potential to severely impact upon the rising level of confidence in the UK economy.
Share this..
Related stories
Who will fund the cost of change in UK banking sector?
The last 48 hours has seen a flurry of announcements from the UK government and UK regulators regarding the future structure of the UK banking system. Not only is the potential for UK banks to broken up and sold on, to increase competition in the market place, but indeed the European Commission is looking to force UK banks to withdraw from certain areas of the market due to the fact they receive s...
Read MoreIs the Tory Party conference a non-starter?
While the Conservative Party conference kicked off in good style yesterday with a few headline grabbing comments and new policies many are actually calling for the conference to be called off in light of the events in the wider investment markets. The demise of Bradford and Bingley (strangely timed just as the conference began), the collapse of a raft of European powerhouses and the rejection of...
Read MoreAre retail sales about to crash in January?
The CBI's monthly survey has dealt a crushing blow to those looking for a sharp turnaround in the UK economy with a report that the sales balance fell to -8 in January from +13 in December. This monthly survey is an indication of how those in the industry have fared over the period, a period which has been impacted by the increase in VAT and the extreme weather in the UK. So what does this mean fo...
Read MorePension changes could leave many without cash
12/01/2015 The charity Age UK has warned that the pension changes coming in April could leave significant numbers of older people running out of money in retirement. The new rules mean anyone over the age of 55 can take as much money as they like out of their Defined Contribution schemes, at lower tax rates. Age UK believes with the new rules pensioners may run out of money by age 75 years....
Read MoreSantander ups fees on “123” current account
14/09/2015 Santander, one of the UK’s biggest banks, have announced that they are more than doubling the charges on it’s main current account, leaving customers out of pocket. The current costs of Santander’s main current account stands at £24 a year. In January, this will be increased to £60 a year. The bank will also be increasing the fees on its main credit card from £24 to £36...
Read More