Brown demands emergency plan to stop oil wrecking recovery

Gordon Brown has ordered top ministers at the Treasury and Department of Business to draw up plans to cope with rising oil prices and a lending drought for UK companies, amid fears that the nation’s economic recovery risks being derailed.

Brown is seeking an international agreement to tackle the rising cost of crude, which rose to almost $72 a barrel on Friday.

With Gulf economies including Saudi Arabia at risk of plunging into recession later this year, according to private forecasts by the International Monetary Fund, western governments fear Opec producers will have a powerful incentive to restrict oil production and force prices even higher.

Whitehall officials are examining proposals for handing the IMF the task of monitoring oil prices as part of the Washington lender’s new beefed-up role as guardian of the global economy. The plan could form part of Britain’s agenda for the next summit of G20 leaders in Pittsburgh, in the US, this autumn.

Brown believes that the G20 meeting in London in the spring missed an opportunity to put in place measures to stabilise the oil price, after it fell from a peak of $147 a barrel to less than $35 early this year.

Guardian