UK: Oil prices force Treasury inflation re-think

The Treasury is privately putting a knife to its widely-derided economic growth forecasts and conservative inflation projections, as it warns that oil prices are set to remain high and volatile for many more years to come.

Senior officials have indicated that the Treasury is informally mulling sharp changes to its inflation forecast for this year, which was based on an oil price of just below $100 a barrel.

Although it will not overhaul its official projections until this autumn’s Pre-Budget Report, it is also anticipating that high oil prices will have a significant effect on growth.

Telegraph