Economic think tank suggests UK would benefit from falling oil price
A renowned economic think tank has today suggested that the UK economy would benefit from falling oil prices over the next three years. However, there may well be a sting in the tail if oil prices continue to fall with the possible onset of deflation. So how will this work?
If oil prices remain at lower levels then we should see prices in business stabilise and then hopefully pick up as and when the economy starts to rise again. However, if we see further reductions in the oil price to substantially lower levels this will then lead to more competition on price and further discounts in the future. An economic climate where prices continue to fall as pricing competition increases will see the endless need to reduce costs which traditionally means redundancies.
As redundancies kick-in and there is less money to spend in the economy, further pricing pressure is injected into the UK, prompting more calls for further cost cuts and a reduction in consumer spending. Deflation is the real issue at the moment as UK businesses battle for customers in one of the harshest economic environments in modern times.
Share this..
Related stories
G20 meeting set to attract significant demonstrations
The forthcoming G20 meeting in London is set to attract significant interest from demonstrators around the world. It has been revealed that police forces in the UK have made the government becoming aware of significant activity within anarchist and anti-capitalist groups which could result in substantial demonstrations and possibly violence at the forthcoming G20 meeting.
This is no...
Has the UK government made the wildcat strike situation worse?
Despite attempts to dampen down the threat of more wildcat strikes this week it appears as though the UK government has stoked the fires of this employment dispute even more with their recent comments. Lord Mandelson in particular seems to have offended the union leaders and employees throughout the UK with his suggestion that UK employers "can go and work in Europe if they want to" although Gordo...
Read More12% of people pay more than half their wage on housing costs
30/01/2015 12% of UK adults are paying more than 50% of their take home wage on their mortgage or rent payments, according to research from the Debt Advisory Center. (DAC). The research found that the majority of adults (69%) spend around 29% of their take home pay on rent or mortgage payments each month. 33% of adults spend less than 20% of their income on housing payments. 12% of adults s...
Read MoreUK inflation falls to 3%
The Office for National Statistics has today announced a 0.1% fall in inflation for the month of January with the rate now down to 3%. While the fall in inflation is welcomed across the board many had expected the rate to drop as low as 2.7% and there is some disappointment in the marketplace. However, the Bank of England is firm in its belief that the UK rate of inflation is set to fall dramatica...
Read MoreCable: Housing boom must be stopped
12/06/2014 Measures need to be taken to stop a housing boom from “getting out of control” in certain parts of the UK, according to business secretary Vince Cable. Various surveys and reports have revealed that house prices have been rising throughout the country by as much as 8% per year. However, the majority of the country has been outpaced by London, as house prices in the capital hav...
Read More