London Briefing/Chris Johns: Oil prices, Asian economies, China's exchange rate and US "imbalances" have dominated recent British newspapers' (financial) headlines.
In many ways, they are all related and as UK Chancellor Mr Gordon Brown limbers up to take over from Prime Minister Mr Tony Blair, they serve as another reminder, if one were needed, that what happens next to the UK economy is often determined far beyond our shores.
Mr Brown may have rediscovered socialism, at least when addressing the party faithful at the annual conference, but he knows full well how that will play with the people who matter.
Oil prices rose when OPEC announced a surprise production cutback. For a moment, everyone forgot how weak that particular cartel has become and how much oil is now being pumped by non-OPEC countries. Oil prices have been on Mr Brown's mind, but for different reasons. In a little-noticed clause in the last finance Bill he gave himself the power to raise tax on fuel without reference to parliament.
Now, Mr Brown is engaged in a fascinating experiment: how much more can he increase spending without improving public services one iota? He needs the money, so petrol taxes are going up, back to the point where they elicited the famous fuel protests that so unnerved Mr Blair. I reckon this will be the sixtieth time a tax has risen under New Labour.
US president George Bush could take a leaf out of Mr Brown's book. Ten or 20 US cents on a gallon of gas would, at a stroke, cure the "imbalances" that cause so many people to fret about the global economy. But that is not politically acceptable.
The policy is dollar depreciation. And there is plenty more of that to come. This cure could actually be worse than the disease - it could easily get out of hand. People should learn to co-exist peacefully with their imbalances.
If a weaker dollar poses a threat for UK exporters, it represents something far worse for the European economy. Another policy change in Washington that poses a much bigger threat to all our growth prospects is the rise of protectionism. Smart insiders are beginning to think this could get really serious.
US politicians are already legislating for tariffs against China in response to what they see as unfair competition via an artificially low Chinese exchange rate. US legislators are reacting to the upcoming presidential election and the simple fact that the economy continues to lose jobs. Protectionism is one of those things that, once unleashed, is very hard to restrain.
One factor driving the "jobless recovery" in the US is an acceleration of outsourcing. Manufacturing jobs have been disappearing for years to lower cost countries but this trend, thanks to technology, is accelerating. And it is now being accompanied by a loss of service sector jobs. In the UK, Lloyds TSB caused a stir recently when it said it would build a brand-new call centre in India. This prompts panic in relatively deprived regions of the UK where such jobs are a mainstay of employment. Traditionally, service sector jobs have not been threatened by globalisation. Technology is changing all of that.
Economists can talk until they are blue in the face about the net benefits of growth in world trade and the industrialisation of Asia. Their analysis is correct but cuts no ice with the anti-globalisation air-heads, protectionist-minded politicians or newly unemployed call-centre workers.
We have to adjust to a new economic reality, rather than pretend that nothing has changed. How we adjust is determined by how flexible our economies are; how quickly we replace jobs lost in one sector with ones created elsewhere.
If we could create an index of flexibility, the UK would stand somewhere behind the US but miles ahead of much of Europe. But many policies introduced by New Labour have acted to make us look more like a European than a US economy. This will have, and is having, predictable consequences.
The EU Commission, never one to talk down Europe's economic prospects, now reckons that the maximum sustainable rate of growth for the continent is now a mere 1.3 per cent.
I would bet that the Romans, the last central bankers to preside over a single European currency, managed more than that.
The global environment never gets any easier. It's how we respond that counts. Mr Brown may fancy his chances now that Mr Blair is in such obvious difficulties. In his darker moments, Mr Blair might be tempted to conclude that Mr Brown is welcome to it all.
