Falling petrol prices could put inflation below zero

19 January 2015

petrol The ongoing plunge of prices at Britain's petrol pumps could pull inflation below zero before the next general election. Handy that.

According to forecasters, the Ernst & Young Item Club falling prices in shops and forecourts in the early part of this year, would be a "shot in the spending arm".

The Item Club, whose predictions are based on the Treasury's economic model, says the fall in oil price is acting as the catalyst.

Which arm is your spending arm? It's a question we've asked for years.

Crude oil prices have halved since last summer and inflation in the UK has declined sharply as a result, hitting just 0.5% in December.

Item’s Peter Spencer reckons that it will all help in boosting economic growth, which he expects to be 2.9% in 2015. “Not every economy will be a winner from oil prices collapsing, but the UK certainly is,” he said.

Hurrah!

TOPICS:   Motoring   Economy

1 comment

  • Jack S.
    Has anyone else noticed the supermarkets rushing to pass on the reduced transportation costs to us. No me neither. Funts.

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