Leading economists are beginning to make some optimistic predictions, which is a very much needed breath of fresh air for businesses. While we've all been so busy listening to the doom sayers we have failed to notice that the price of oil has plummeted.
This, say leading experts at Ernst & Young could be our salvation. It could, given the impact it will have on consumer spending and manufacturing, slow down the current economic decline.
Ernst & Young predicts that falling oil prices (down to $47 from a $147 high in July 2008) will reduce inflation, boost manufacturing and restore economic growth. The company also predicts that if the price stabilises at $20 a barrel it will boost economic growth by 0.2% this year and a further 0.8% by 2010.
It is not all bright lights and happy thoughts though. E&Y also cautions that if the price falls too far too fast it could spark deflation and that won't be good. It also warns that this uplift won't be enough to pull us out of recession in 2009.
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