Hi Liam, I have been a big fan of your economic analysis for more years than I care to remember, so I was happy to subscribe to your substack posts. For me, this is exactly what I signed up for! Keep up the good work.. best wishes David Graham
“The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.”
Hi Liam - whilst the lower oil price will help, fundamentals will out.
What’s clear for the UK economy still is that:
1. growth forecasts/actuals are lower (BoE yesterday/IMF) vs the Spring Statement:
2. Consequently aggregate UK tax receipts will be lower. That’s before the millionaire exodus is factored in or changes in taxpayer behaviour (CGT receipt trends) etc
3. No clear material improvements in productivity:
A. public sector is still an “anchor” and has had money thrown at it with no reforms etc…. the definition of throwing good money after bad :and
B. private sector negative sentiment - who would invest now?
4. Public sector spending discipline and reform is an oxymoron. Nobody is willing to give up anything and the Unions are smelling blood after Labours pay capitulation on taking power. Underlying DB pension liabilities are ratcheting up consequently
Whilst interest rate cuts and trade deals will help, fundamentals will out. So looking at the fiscal rules/public sector direction of travel there is still going to be a moment of reckoning in the foreseeable future. So whilst a lower oil helps, my view is that after a period looking outside the UK gazing at external factors, the noose is still tightening on a UK fiscal crisis.
Or to put it another way, Starmer & Reeves can’t escape the anti-growth measures enshrined in the October 24 Budget…
Hi Liam, I have been a big fan of your economic analysis for more years than I care to remember, so I was happy to subscribe to your substack posts. For me, this is exactly what I signed up for! Keep up the good work.. best wishes David Graham
Can I ask something? When I was growing up in the 60s, North Sea oil was being pumped out and distributed to all of us. Was OPEC around then ?
Thank you ❤️
“The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.”
Hi Liam - whilst the lower oil price will help, fundamentals will out.
What’s clear for the UK economy still is that:
1. growth forecasts/actuals are lower (BoE yesterday/IMF) vs the Spring Statement:
2. Consequently aggregate UK tax receipts will be lower. That’s before the millionaire exodus is factored in or changes in taxpayer behaviour (CGT receipt trends) etc
3. No clear material improvements in productivity:
A. public sector is still an “anchor” and has had money thrown at it with no reforms etc…. the definition of throwing good money after bad :and
B. private sector negative sentiment - who would invest now?
4. Public sector spending discipline and reform is an oxymoron. Nobody is willing to give up anything and the Unions are smelling blood after Labours pay capitulation on taking power. Underlying DB pension liabilities are ratcheting up consequently
Whilst interest rate cuts and trade deals will help, fundamentals will out. So looking at the fiscal rules/public sector direction of travel there is still going to be a moment of reckoning in the foreseeable future. So whilst a lower oil helps, my view is that after a period looking outside the UK gazing at external factors, the noose is still tightening on a UK fiscal crisis.
Or to put it another way, Starmer & Reeves can’t escape the anti-growth measures enshrined in the October 24 Budget…
Liam,
Forensic as always, what about the velocity of money ?
Thank you Robert. So I assume we don’t have to join OPEC if we produce oil for ourselves alone?
Thank you for explaining it all to me Paul
Nobody “has to” join this cartel whether or not they export oil or only use it for domestic purposes.