The study by PwC also said continually low oil prices could boost the UK economy, with GDP forecast to rise by about 1 per cent a year on average between now and 2020.
The economic benefits could result in higher consumer spending and a slight narrowing of the UK’s trade deficit, the research added.
The report said: “Lower oil prices should be positive for most sectors of the UK economy, households and the government. But the scale of these benefits remains highly uncertain depending on how oil prices evolve from here.”
PwC considered the impact on the UK economy if oil prices stayed at their current low level, recovered partially or returned to more than $100 a barrel.
If the price remained at about $50 a barrel, the analysis suggested employment could increase by 91,000 by 2020.
The number of people in work could rise by 37,000 if prices recovered to $73 a barrel, while a return to $108 would result in only a small increase in employment of 3,000.
The report said: “The significant fall in oil prices since mid-2014 should increase overall UK economic activity as the cost of production decreases for businesses, especially for those that are heavily dependent on oil inputs.
“This will boost both investment and employment.
“Although the oil and gas extraction sector is negatively affected by the reduction in the oil price, sectors such as agriculture, air transport, coke and refined petroleum manufacturing and oil-intensive manufacturing sectors will benefit as the price of their key input falls.”
It added: “As a result of growing economic activity, government tax revenues also rise as the tax take from corporate and personal income taxes increase, more than offsetting declining revenues from the oil and gas sector.
“The fall in the oil price should also have a small impact in narrowing the UK trade deficit.”
Consumers would also benefit, with lower oil prices leading to lower production costs, with the report suggesting a “persistently low” oil price of $50 a barrel could see household spending rise by £372 a year in real terms between now and 2020.
PwC economist John Hawksworth said: “Future oil prices remain highly uncertain, so businesses would be well advised to look at alternative scenarios.
“In our central case, where oil prices rise back gradually to $73 per barrel by 2020, we project UK GDP to be around 0.5 per cent higher on average over the next five years and employment around 40,000 higher in 2020 than if oil prices had remained at mid-2014 levels.
“If the oil price were instead to settle at $50 per barrel, however, then the eventual boost to UK employment could be more than twice as large as this at around 90,000 in 2020.”
Mr Hawksworth went on: “Real household incomes also rise as oil prices fall, which increases consumer spending.
“As a result of growing economic activity, we expect that government tax revenues will rise as the tax take from corporate and personal income taxes increases by more than the loss of North Sea oil and gas revenues.”
He added: “Of course, this does pose important challenges for the North Sea oil industry that the Chancellor should bear in mind in making Budget decisions.”
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