Soaring oil costs will hit UK’s growth

Sky-high oil prices will depress Britain’s growth rate to a sickly 2 per cent this year as businesses bear the brunt of soaring energy costs, according to the Ernst and Young Item Club think-tank.

As Opec, the oil-producers’ cartel, prepares to meet under strong political pressure to pump more crude oil into the markets, the report by Item’s Peter Spencer warns that Gordon Brown’s forecast for growth of 3 to 3.5 per cent this year looks over-optimistic if prices remain at around $65 a barrel.

The Observer