As oil tumbles to another five-year low, the consequences for the global economy will be far-reachingPlummeting oil prices could give a major boost to the UK’s economic growth and provide a turnaround in fortunes for the Eurozone.Consultancy group Oxford Economics is forecasting the UK economy to grow by 2.6 per cent on average over 2015 and 2016. However, if oil prices average as low as $40 a barrel over those two years, growth could top 3.2 per cent. Drops to $60 and $50 would also lift growth. Brent crude oil – extracted from the North Sea – edged down to $66 a barrel yesterday. It was just shy of $115 a barrel in June. Oxford Economics believes that an average price of $64 dollars a barrel in 2015 followed by a steady recovery to $86 by 2019 would increase global economic output by 0.4 per cent by 2017. It may even be enough to revive the weak Eurozone economy, which could be boosted by 0.3 per cent by 2017. The Organisation of Petroleum Exporting Countries (Opec), which includes Iran, Kuwait, Saudi Arabia and the United Arab Emirates (UAE), would suffer, however, as their 2017 output would be 0.7 per cent lower than planned.Among developed economies, Hong Kong is set to benefit the most if oil prices fall to $40 per barrel, with an extra one per cent of economic growth per year over 2015 and 2016 – up to 3.9 per cent from 2.9 per cent.At the other end of the spectrum are Russia, Saudi Arabia and Norway. Russia’s economic growth has already been hit by economic sanctions. It relies on oil as a major export and generator of state revenues. Russia’s economy could contract by 2.5 per cent if oil drops to $40 a barrel while Saudi Arabia and Norway would stagnate. Cheaper oil would also weigh down on inflation in the UK and could turn negative if oil prices dropped below $60 a barrel. This would likely prevent the Bank of England from raising interest rates from their historic lows.Portugal, France and Spain could see annual inflation as low as minus two per cent over the next two years if oil averaged at $40 a barrel. An average oil price of around $60 over the next two years would also have an impact on current accounts – exports minus imports. Taiwan, Hungary and Thailand all have their current account balances boosted by over two per cent of GDP. “A fall in the price of Brent crude to $40 per barrel remains unlikely in our view, yet is not beyond the realms of possibility,” report author John Bulford told City A.M.“Our model highlights some real vulnerabilities in a number of countries, not least of which is Russia. “In general, however, such a fall in the oil price would provide a welcome boost to the global economy,” Bulford added. Tuesday 9 December 2014 8:57 pm Tags: Oil prices by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeTele Health DaveRemember Pierce Brosnan’s Wife? Take A Deep Breath Before You See What She Looks Like NowTele Health DaveHero WarsThis game will keep you up all night!Hero WarsMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryMaternity WeekA Letter From The Devil Written By A Possessed Nun In 1676 Has Been TranslatedMaternity WeekThe No Cost Solar ProgramGet Paid To Install Solar + Tesla Battery For No Cost At Install and Save Thousands.The No Cost Solar ProgramMoneyPailShe Was A Star, Now She Works In ScottsdaleMoneyPailUltimate Pet Nutrition Nutra Thrive SupplementIf Your Dog Eats Grass (Do This Every Day)Ultimate Pet Nutrition Nutra Thrive SupplementNational Penny For Seniors7 Discounts Seniors Only Get If They AskNational Penny For SeniorsFungus EliminatorIf You Have Toenail Fungus Try This TonightFungus Eliminator whatsapp More From Our Partners Bill Gates reportedly hoped Jeffrey Epstein would help him win a Nobelnypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgKiller drone ‘hunted down a human target’ without being told tonypost.comUK teen died on school trip after teachers allegedly refused her pleasnypost.com980-foot skyscraper sways in China, prompting panic and evacuationsnypost.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comFeds seized 18 devices from Rudy Giuliani and his employees in April raidnypost.comBiden received funds from top Russia lobbyist before Nord Stream 2 giveawaynypost.comMark Eaton, former NBA All-Star, dead at 64nypost.com whatsapp Tumbling oil prices to give lift to UK economy Show Comments ▼ Share Chris PapadopoullosChris Papadopoullos was City A.M.’s economics reporter until February 2016. He is an economist at OMFIF.