The price of oil continues to plummet, with prices now hitting $66 a barrel. This drastic fall might suggest a world economy in crisis, but the drop in crude prices could have a positive impact on the UK\u2019s economy.<\/p>\n
This is the view of consultancy group, Oxford Economics. They have forecast that the UK economy will grow by 2.6 per cent on average over 2015 and 2016, but have said that this could be revised up to 3.2 per cent if the price of oil gets hits $40 a barrel over the next two years.<\/p>\n
They have also said that even a modest drop in oil prices to $64 a barrel in 2015 followed by a steady recovery to $86 by 2019, would increase global economic output by 0.4 per cent by 2017.<\/p>\n
They have even suggested that oil prices could also save the stagnating Eurozone economy, which could see growth hit 0.3 per cent by 2017 if prices remain low.<\/p>\n
\u201cA fall in the price of Brent crude to $40 per barrel remains unlikely in our view, yet is not beyond the realms of possibility,\u201d the Oxford Economics report author, John Bulford, told City A.M.<\/p>\n
\u201cOur model highlights some real vulnerabilities in a number of countries, not least of which is Russia.\u201d<\/p>\n
He added: \u201cIn general, however, such a fall in the oil price would provide a welcome boost to the global economy.\u201d<\/p>\n
The report also said that cheaper oil would also prevent inflation in the UK rising and could even turn negative if oil prices dropped below $60 a barrel \u2013preventing the Bank of England from raising interest rates.<\/p>\n","protected":false},"excerpt":{"rendered":"
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