The declines in the cost of crude oil since May have revived concerns about global growth and deflation risks. However, the falls mainly reflect positive supply-side developments and are also small compared to those that have gone before. The impacts on activity and inflation are therefore unlikely to be a key factor in interest rate decisions – notably in the US. What’s more, we continue to expect oil prices to recover, albeit gradually, over the next year or so, rather than drop further.



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