« Why Are Oil Prices So High and Will They Stay That Way ?

Geopolitical tensions and a growing disparity between supply and demand have driven up prices. Here is what that
means and what could happen next.
[...]

HOUSTON — Oil prices are increasing, again, casting a shadow over the economy, driving up inflation and eroding
consumer confidence.
Crude prices rose more than 15 percent in January alone, with the global benchmark price crossing $90 a barrel for
the first time in more than seven years, as fears of a Russian invasion of Ukraine grew.
Though the summer driving season is still months away, the average price for regular gasoline is fast approaching
$3.40 a gallon, roughly a dollar higher than it was a year ago, according to AAA.

What impact would higher oil prices have on the U.S. economy?
A big jump in oil prices would push gasoline prices even higher, and that would hurt consumers. Working-class and
rural Americans would be hurt the most because they tend to drive more. They also drive older, less fuel-efficient
vehicles. And energy costs tend to represent a larger percentage of their incomes, so price increases hit them harder
than more affluent people or city dwellers who have access to trains and buses.

But the direct economic impact on the nation would be more modest than in previous decades because the United
States produces more and imports less oil since drilling in shale fields exploded around 2010 because of hydraulic
fracturing. The United States is now a net exporter of fossil fuels, and the economies of several states, particularly
Texas and Louisiana, could benefit from higher prices.

By Clifford Krauss
Feb. 2, 2022

https://www.nytimes.com/2022/02/02/business/economy/oil-price.html
 « How Queen Elizabeth II's death could impact the UK economy. »

[…] The death of Queen Elizabeth II on Thursday, September 8, has deeply affected the United Kingdom. While
the country is in a 10-day period of mourning, the monarch's death could also further slow an economy weakened by
double-digit inflation, risk of recession, numerous strikes and a fall in sterling.

This 10-day period, which puts British institutions on hold, is delaying the implementation of plans to support
a moribund economy. The Bank of England, which announced at the beginning of August that it expected a recession
from the end of 2022 to last more than a year, has postponed by a week its Monetary Policy Committee meeting
initially scheduled for next Thursday, at which a decision on a rate hike was widely anticipated in the face of
inflation.
Last Thursday, two days after her appointment, new Prime Minister Liz Truss announced a massive aid plan for
British households and businesses in the face of soaring energy costs, intended to result in a two-year freeze on
energy prices for individuals and a six-month freeze for businesses and public institutions.

But the additional budget, which was originally scheduled to be debated in the House of Commons on
Monday, September 19, is currently off the agenda, as the British Parliament has put all discussions on hold for 10
days, following Operation Unicorn (the plan if the queen died in Scotland). "It is likely that the emergency budget
will be delayed," Danni Hewson, an analyst at the investment firm AJ Bell, told CNN Business.
The only relief in sight for the Truss government is that railway workers and postal workers have announced that they
are suspending walkouts until further notice.

Holidays could be costly :

British gross domestic product (GDP) rebounded slightly in July, but this is only a short respite from the
looming recession, which could be exacerbated by an additional holiday for the funeral of Queen Elizabeth II,
scheduled for September 19. [...]

Another public holiday has been declared for the queen's funeral, which means that the British economy will
have two more holidays in 2022 than in a normal year. Samuel Tombs, chief economist at Pantheon Macroeconomics,
told AFP that next week's day off "has the potential to be more damaging for the economy than the extra day off for
the Jubilee in June, as the hotel and tourism sector is unlikely to benefit … but many businesses will still close."

Royal events to generate revenue :

Pantheon Macroeconomics estimates that the economic impact of the funeral could shave 0.2% off
September's GDP. "But many companies will be able to catch up, as most of them did in June," Mr. Tombs cautioned.
Generally speaking, major royal events also give a boost to tourism and trade, particularly in souvenirs, John
Plassard, an analyst at the Mirabaud brokerage, told AFP. The monarchy alone is likely the source of 600 million
euros of the 20 billion euros of revenue generated by the country's tourism sector, according to Mirabaud. Sales of
souvenirs could increase by 60 million pounds (just over 69 million euros) in connection with the funeral.
Business also continues on the London Stock Exchange (LSE), which was trading normally on Friday, although it is
expected to suspend trading on the day of national mourning on Monday, September 19, for the queen's funeral.

By Clémence Apetogbor
Published on September 13, 2022 at 04h23, updated at 07h26 on September 13, 2022 in « Le Monde »