Cheap oil has potential to give UK extra 121,000 jobs in 2016
The UK economy could be set for a massive jobs boost next year, provided oil prices remain subdued, financial services firm PwC said today.
An oil price of $50 per barrel would create an extra 121,000 jobs in 2016 compared to if prices had stayed at their mid-2014 level of $108, PWC forecasts.
It is also believes that the level of GDP could be 1.4 per cent higher in 2016 if oil prices remain below $50 a barrel compared to if they had remained at their mid-2014 price of $108 a barrel.
Brent crude oil – a North Sea benchmark – is currently around $60 a barrel. Oil traded above mostly above $100 a barrel in the four years to mid-2014, before prices began plummeting.
Although the oil and gas sector is negatively affected by subdued oil prices, sectors such as agriculture, air transport and oil-intensive manufacturing will benefit, PWC say.
The forecasts become less optimistic if oil prices are assumed to stray above current low levels. If prices begin a steady path up to $73 a barrel by 2020, then the number of extra jobs would be 53,000 in 2016.