Oops. Yeh i missed that last point about oil. John is right, the UK is a major IMPORTER of oil!!
Also one has to consider the effect of the exchange rates on the inflation rate. If imports become more expensive, then prices of imports of raw materials go up. This leads to firms passing these costs on to consumers, so we get cost-push inflation.
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Economics Unit 6 - Edexcel - 28th June 2004 watch
- 29-06-2004 21:43
(Original post by John Porcella)
- 29-06-2004 23:26
No, sorry, but the UK is not even a minor net exporter of oil! The UK is now a net importer of oil.
The reason why the UK still imported OPEC oil even when the North Sea was producing more than today is because OPEC oil is better for car fuel, whereas North Sea oil is better for making aeroengine fuel.
Good luck in getting into Cambridge... I am sure you will make it.
yeah i was wondering about that although in terms of the sterlings value against the euro UK oil production means that rising oil prices will have a greater effect (ceteris parabus) in depreciateing the euro than the pound thus leading the pound to appreciate against the euro.
I may have been wrong to describe the UK as n oil exporter although i just checked the PMs policy unit website (shall i trust it?) and it said
'Although the UK is currently a net exporter of both crude oil and oil products, we currently import a percentage of both our crude oil and oil product requirements. Crude oil produced in the UK generally contains relatively lower levels of contaminants such as sulphur and therefore can fetch a higher price than some other crude oils on the international market. This makes it more attractive to export much of the UK production (3/4 in 2000) and import the majority of our crude oil requirements.
'The UK is currently a major oil producer and a net exporter. Presently, almost 95% of European oil production comes from UK, Norwegian and Danish producers operating in the North Sea (IEA). Output from the North Sea continued to rise until 1999 in spite of low / falling prices (in real terms) throughout the late 1980s and 1990s, owing to technological advances, cost-cutting and efficiency improvements that have made previously uneconomic fields attractive. '
That was however from 2001 - dont know if situation has changed
i wish id seen the statistic about 95 per cent before exam
good luck everyone
- Our demand for imports.
- 30-06-2004 10:24
isnt the demand for imports likely to depreciate the pound against the euro rather than appreciate it coz it increases the supply of the pound
- Labour Market Flexibility, Good Competitiveness.