2 Feb 2015
Falling oil prices positive for UK growth – GS
FXStreet (Barcelona) - Analysts at Goldman Sachs view that falling oil prices will positively impact UK growth over the next two years, thus forecast UK GDP to stand at 3.0% in 2015 and 2016.
Key Quotes
“Oil prices have fallen by 57% in Dollar terms and 52% in Sterling terms from their average through the first half of 2014. This decline has already had a very visible effect on consumer prices in the UK and elsewhere.”
“Annual UK CPI inflation dropped below 1% in December and, in the coming months, we expect it to fall to around zero.”
“In time, we expect that lower oil prices will also have a large positive effect on real output.”
“Our estimates imply that the fall in oil prices in the past six months is likely to boost the level of GDP by 1-1½% over a period of two years.”
“Our belief in the importance of this effect is a key factor underlying our relatively optimistic views on UK growth in 2015 and 2016 (we expect growth of 3.0% in 2015 and 2016, vs. consensus of 2.6% and 2.4%).”
Key Quotes
“Oil prices have fallen by 57% in Dollar terms and 52% in Sterling terms from their average through the first half of 2014. This decline has already had a very visible effect on consumer prices in the UK and elsewhere.”
“Annual UK CPI inflation dropped below 1% in December and, in the coming months, we expect it to fall to around zero.”
“In time, we expect that lower oil prices will also have a large positive effect on real output.”
“Our estimates imply that the fall in oil prices in the past six months is likely to boost the level of GDP by 1-1½% over a period of two years.”
“Our belief in the importance of this effect is a key factor underlying our relatively optimistic views on UK growth in 2015 and 2016 (we expect growth of 3.0% in 2015 and 2016, vs. consensus of 2.6% and 2.4%).”