Falling oil lowers inflation outlook

The price of WTI crude oil slipped to $29.67 per barrel and a new 12-year low. Oil stocks and currencies of oil producing nations predictably fell.  As 2015 ended, and before the price of oil started falling again, it had been expected that the base effect of the original falls in Q3 2014, putting downward pressure on inflation in the developed world, would be falling out of the year-on-year by now. Barclays also lowered their inflation outlook for the UK as a result of the fall and pushed back their expectation of a Bank of England interest rate hike to the fourth quarter of 2016 and way further behind the Federal Reserve which is already hiking.