Fear of global slowdown as oil price soars
Finance ministers from the G7 nations issued a blunt warning this weekend that rising energy costs and the American housing crisis will put the brakes on the global economy over the next 12 months, as oil prices surged towards $100 a barrel.
Crude prices have smashed a series of records in recent weeks, as the producers' cartel, Opec, gambles that oil-consuming countries can withstand a fresh jump in costs. US crude for November delivery touched $90 a barrel on Friday.
At the same time, equity prices on both sides of the Atlantic plunged and the dollar hit new lows against global currencies amid pessimism that the fallout from the US sub-prime crisis will spread well beyond the housing sector.
Gathering in Washington, on the fringes On The Fringe is a popular Pakistani television show on Indus Music. It is hosted and scripted by the eccentric television host and music critic, Fasi Zaka and directed by Zeeshan Pervez. of the International Monetary Fund's annual meeting, G7 finance ministers issued a statement saying that the fundamentals of the world economy remain strong, but the US housing downturn and high oil prices will hit growth.
The cost of oil has been boosted by higher than expected demand as the northern hemisphere winter gets under way, and by rising geopolitical ge·o·pol·i·tics
n. (used with a sing. verb)
1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation.
a. tensions between Turkey and Iraq. Analysts said the once unthinkable $100-a-barrel mark could be just days away. 'It's uncharted territory
'I think we're at the crunch point,' agreed Kona Haque, senior commodities editor at the Economist Intelligence Unit The Economist Intelligence Unit (EIU) is part of The Economist Group. It is a research and advisory company providing country, industry and management analysis worldwide and incorporates the former Business International Corporation, a U.S. , 'Prices could test $100.'
Opec has announced it will increase production by 500,000 barrels a day from 1 November, but Haque said that was 'nowhere near enough'. Alistair Darling, the Chancellor, has added his voice to calls for the cartel to open the taps.
Higher oil prices will contribute to short-term inflationary pressures, making it harder for central banks This is a list of central banks.
Contents A B C D E F G H I J K L M N O P Q R S T U V W Y Z to cut interest rates and ease the pain of the credit crunch Credit Crunch
An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. , while in the medium-term, higher bills for households and businesses take their toll on growth.
Policymakers are becoming increasingly alarmed about Opec's refusal to act. Julian Lee of the Centre for Global Energy Studies in London, said it was playing 'an extremely dangerous Exteremely Dangerous is a 1999 four part series for ITV starring Sean Bean as an ex-MI5 undercover agent convicted of the brutal murder of his wife and child who goes on the run to try and clear his name. He sets out to follow up a strange clue sent to him in prison. game'.