David Prosser: BP should hold its nerve and resist begging for funds from the Middle East

Outlook: BP investors have already put up with a huge loss; further loss as a side-effect of aninfusion of capital from the Middle East would hardly be welcomed

If it worked for Barclays, then why not for BP? When the bank found itself laid low by the credit crunch and the subsequent regulatory pressure on funding, it turned to the Middle East, rather than the British government, for support, securing injections of capital from Abu Dhabi and Qatar.

Now BP – with its value devastated by the ongoing Gulf oil-spill disaster – is exploring similar options, with new investment possible from a number of Middle Eastern state-backed funds as BP seeks to save itself from opportunistic predators.

For Barclays, the decision to sell a stake to the Middle East looks to have worked out well. That it avoided having to add Her Majesty's Government to its shareholder register enabled the bank to avoid the humiliating strictures to which the State-owned banks have since been subjected in the UK. By contrast, its Middle-Eastern stakeholders have been models of restraint, pursuing the sort of hands-off approach to their investments that managements dream about.

Still, don't forget the disquiet among the bank's shareholders at the time of the bailout. The preferential terms offered to persuade Abu Dhabi and Qatar to cough up stuck in the craw of many of Barclays' existing investors, who saw the value of their holdings diluted without a great deal of say in the matter. BP would presumably have to offer similar inducements, which would be likely to sit even less happily with its shareholders.

After all, they have already had to put up with a huge loss on the value of their investments, as well as an ongoing threat to their dividend payments. A further loss as a side-product of an infusion of capital from the Middle East would hardly be welcomed.

Nor should BP's executives count on their new paymasters being quite such silent partners as they have been at Barclays. Oil is, after all, a business that these folk know pretty well.

With the oil major's share price less than half its pre-crisis level, there's likely to be no shortage of would-be acquirers considering their options. But moving prematurely to counter such threats could prove rash.

The full cost of the Gulf of Mexico disaster is far from clear, but assuming all goes well with the second well, which is close to completion, the end of the first phase of the disaster is at least in sight. Patience, please.

We have much to fear, including fear itself

The Office for Budget Responsibility, George Osborne's new fiscal watchdog, warned that the Chancellor's emergency Budget of a fortnight ago meant economic growth would now be slower. Very speedily, most of the private sector has signalled it shares that view.

It's not the slowdown in growth that was the most worrying headline in yesterday's monthly report from Markit's surveys of purchasing managers in the services sector. Rather, it is the precipitous fall in managers' confidence about the outlook for their businesses that should alarm us – particularly as last week's data on the construction industry showed a near identical trend, with another record-breaking plunge in optimism about the future.

All recoveries from recession are marked by ups and downs. There is, however, a moment when a weak and variable recovery becomes a return to outright recession. What much of the private sector now seems to fear is that the UK is now heading for that moment.

We know how the different economic arguments stack up. In one camp sit Mr Osborne's supporters, who believe the cuts he proposes are both necessary and desirable, in the sense they will prompt recovery as private industry steps into the areas vacated by the public sector. This is what happened in similar circumstances in the 1980s, they say.

The counter-argument is that as the private sector is not robust enough to meet that challenge, the Chancellor's spending cuts will drive us into a downturn, or even a depression of the type seen in the 1930s when the US did something similar.

It is possible to model both arguments using real data and projections, but one factor the statisticians find difficult to take into account is confidence – and the effect it might have on the behaviour of both consumers and corporates.

Still, while it is early days in this argument – we don't even have the full detail of the cuts yet – the first signs are that confidence about the future is falling faster than economic performance.

And make no mistake: the latter will follow. There is a real danger now that the fear of a double-dip actually delivers one, even though, other things being equal, we might have muddled through.

BBC loses in licence fee deal with Worldwide

The strong performance of BBC Worldwide, revealed yesterday, is hardly surprising given that it gets to use the fantastically valuable BBC brand without paying a penny – and that it has first dibs on rights to the corporation's programming.

Given the fantastic work the BBC produces – courtesy of licence-fee payers, naturally – and its unrivalled brand value, the White City gang, hardly renowned for their business acumen, can't muck it up.

Still, while defenders of the status quo point out that Worldwide money (or what's left after generous bonuses for staff, that is) is ploughed back into programme-making, it's disappointing that the political upheaval of the past few months seems to have stymied progress on the debate about this organisation's future.

It makes no sense for a business supposedly run on a commercial basis at arms length from the BBC to get these fabulous advantages for free. The corporation is certainly doing itself out of revenue by not charging for the use of its brand and may be missing out further by its inability to put its rights up for auction in a genuinely competitive process.

Life and Style
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Melissa and Joan Rivers together at an NBC event in May 2014
peopleDaughter Melissa thanks fans for 'outpouring of support'
Life and Style
Life and Style
Chen Mao recovers in BK Hospital, Seoul
The giant banner displayed by Legia Warsaw supporters last night
Life and Style
One in six drivers cannot identify a single one of the main components found under the bonnet of an average car
motoringOne in six drivers can't carry out basic under-bonnet checks
Fungi pose the biggest threat globally and in the UK, where they threaten the country’s wheat and potato harvests
environmentCrop pests are 'grave threat to global food security'
Pupils educated at schools like Eton (pictured) are far more likely to succeed in politics and the judiciary, the report found
Arts and Entertainment
Simon Cowell is less than impressed with the Strictly/X Factor scheduling clash
tvSimon Cowell blasts BBC for breaking 'gentlemen's agreement' in scheduling war
ebooksAn evocation of the conflict through the eyes of those who lived through it
peopleWrestling veteran drifting in and out of consciousness
Arts and Entertainment
Shady character: Jon Hamm as sports agent JB Bernstein in Million Dollar Arm
filmReview: Jon Hamm finally finds the right role on the big screen in Million Dollar Arm
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
Brad Pitt and Angelina Jolie reportedly married in secret on Saturday
peopleSpokesperson for couple confirms they tied the knot on Saturday after almost a decade together
footballAnd Liverpool are happy despite drawing European champions
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Head of Marketing (Online & Offline, Media, Digital, Strategy)

£85000 - £100000 per annum: Ashdown Group: Head of Marketing - Slough, Berkshi...

Database Developer (SSIS, TSQL, Microsoft SQL) London Finance

£35000 - £55000 per annum: Harrington Starr: A Global global asset management ...

Web Developer/UI Developer (HTML5, CSS3,Jquery) London

£55000 - £65000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone