Importers and producers will be significantly impacted, business costs will fall and consumers incomes will stretch further
There have been four major recessions in the West since the mid-1970s and each has followed a spike in the oil price. All downturns have their own peculiarities, but one common thread links the stagflation of the seventies to the mega-crash of 2009: dearer crude. The opposite also applies. A low oil price was a vital ingredient in the post-war Golden Age, and a falling oil price lubricated the strong and sustained growth of the 1990s. Logically, therefore, the 25% decline in the cost of crude since June should mean higher levels of activity.
For that to happen, however, the oil price will have to fall a lot further, to somewhere around $50 a barrel. At $115 a barrel the price was consistent with rip-roaring levels of demand.