It’s not all misery from the Trump tariffs

A leading economist has said that the current economic turmoil surrounding US tariffs may benefit consumers in some ways, with oil prices and interest rates look set to tumble.

If oil prices – which stood at 60.50 USD on Wednesday afternoon – continue to tumble then the drop will passed on to customers filling up their vehicles with petrol or diesel at the pumps.

Petrol prices here are expected to drop by up to 10p per litre if the current trends continue.

Paul MacFlynn, co-director of the Nevin Economic Research Institute told the Irish News that the short term impacts of the upheaval might even appear positive for consumers.

“The drop in the oil prices is likely to have an impact on forecourts here before long and anyone with an empty oil tank might do well out of the next couple of weeks,” he said.

Meanwhile, mortgage holders and those paying back credit card debt could also be better off if the Bank of England cuts interest rates in the coming days.

Financial markets and economists are predicting that the Bank of England will reduce borrowing costs by more than expected this year to seek to boost the economy amid fears of a recession.

Central banks cut interest rates in response to concerns of an economic downturn in the hope that cheaper borrowing will encourage more spending.

“The Bank of England will see pressure for more rates cuts, both because of easing energy price pressures and to support the economy as it adjusts to this new trading environment. That is in the short term,” Mr MacFlynn added.

However, he cautioned that despite the short term respite, that the turbulence currently hitting the world markets was likely to come home to roost here before long.

“However, the falling oil price is a sign that the expectations for economic growth have deteriorated sharply,” he said.

“We won’t be immune from that contraction in output. While energy prices will ease, tariffs will increase prices and, like all price spirals, it will not be contained solely to the goods that are directly impacted.

“So, while there might be some small relief in the short term, unless we see a significant climbdown on this in the next couple of weeks, the pain of this disruption will be with us before long.”