Stephen King: There are other reasons for concern about the economy

But it is not as simple as that. What we lose with one hand we gain with the other. Our oil prices are high primarily due to the strength of demand in the United States and in Asia from countries such as China.

China is using more and more oil as it develops and is now the second most important consumer after the US. But the reason China is so successful is partly because it exports a lot of consumer goods, including computers and televisions.

So this has not just resulted in higher energy prices for the Western consumer. They are also benefiting from cheaper consumer goods.

Because goods which were once made in Europe are now made in China, it is simultaneously driving down labour costs as it drives up energy prices. So China's success is also driving down overall prices.

Manufacturing employment in this country has gone down dramatically over the past 20 to 30 years. What we are experiencing now from China is no different from the threat from Japan and South Korea in the 1970s and 1980s. But manufacturing jobs have been replaced with other fields such as design or the media. The higher utility prices will certainly have an impact on companies. But, instead of pushing up prices for their customers, what companies have done so far is out-source labour to cheaper parts of the world. Once again, this has the effect of driving down labour costs.

These days, industry is so globalised it has the ability to withstand oil-price shocks. Companies are also more energy-efficient and do not use as much electricity.

There is certainly no suggestion that we are about to return to the dark days of the mid-1970s when petrol rationing was threatened. Frankly, there are far bigger reasons - such as the over-inflated housing market - to be concerned.

Stephen King is managing director of economics at HSBC