The British pound has been dropping like a stone, and the big UK banks all seem to be potential nationalization poster boys. Across the pond, there’s increasing concern that the UK could really get blown to shreds as things keep getting worse.
Energy analyst Gregor MacDonald, who’s been examining the possibility of extreme political disturbance across the various energy states, analyses the possibility for real calamity in the UK:
First, the UK has only just in the last two years tipped from net oil exporter to net oil importer. The change is then magnified by the fact that UK natural gas demand increasingly calls upon global LNG supply. This is a hard corner. Unlike other petrostates, the UK was not seeing enormous oil revenues that dwarfed GDP from other sources. Rather, oil revenue and security of supply were more embedded into overall UK financial strength, and partly formed its ability to become a nation oriented towards financial services. To have this oil revenue slip back from the net export threshold is not trivial, for the UK. And now, to have this revenue fall so dramatically in terms of price, and volume, at the same time The Square Mile is imploding, makes for a very big change, a large “delta.”
Pressures such as these lead to labour actions. This month’s protest in the UK against foreign workers directly impacted the UK oil refinery complex. And this echoes last year’s labour action, at the Grangemouth refinery. Readers may recall the Grangemouth strike also affected UK North Sea oil production, as supply flow is part of a chain that depends very much on northern refinery complexes to take up daily production. This is exactly the kind of delicate, high level optimization that makes developed countries more vulnerable now, when compared to less developed countries.
The faltering, finance-heavy means pain for a while. But we have to ask, how good are the longterm prospects for the UK? A recent study found that British teenagers have lower IQs than their counterparts did 30 years ago, which runs against all patterns in developed economies:
Tests carried out in 1980 and again in 2008 show that the IQ score of an average 14-year-old dropped by more than two points over the period.
Among those in the upper half of the intelligence scale, a group that is typically dominated by children from middle class families, performance was even worse, with an average IQ score six points below what it was 28 years ago.
The trend marks an abrupt reversal of the so-called “Flynn effect” which has seen IQ scores rise year on year, among all age groups, in most industrialised countries throughout the past century.