It goes to show what a parlous state the world is in when the oil price sits at $46 a barrel and still the wheels of economic growth refuse to turn.
The OECD says global trade is only inching ahead and will restrict GDP growth in 2017 for the global economy to 3.2%, up slightly from 2.9% this year.
The UK is faring even worse. It will grow only 1% next year after struggling to 1.8% in 2016. It is clear why Britain will suffer in 2017 after reading the latest reports by Bank of England agents, which show that investment and employment are expected to flatline over the next year.
Anxious businesses are preparing to hunker down and continue to run their operations as before, but forget about any plans for expansion. The future is too uncertain.
Making matters worse, a modest improvement in public finances in August failed to get the government’s borrowing back on track, leaving the chancellor, Philip Hammond, with a bigger deficit than projected in the March budget.
Yet the UK, like most of Europe, is a net importer of oil and was due to enjoy a dividend from lower prices. Oil remains the lubricant of global business and was largely to blame for corporate woes when it reached $115 a barrel between 2010 and 2013. Then came the China slowdown and the price of the black stuff plummeted.
To some extent, Britain’s boom in 2014-15 was built on the oil bonus that fed directly into household disposable incomes. It saved the eurozone from further stagnation.
At prices below $50 a barrel, that dividend means households and businesses are paying much less for their fuel than three years ago, and both should feel good about the prospects for their finances.
The OECD blames the fact that they do not feel that way on the British vote to leave the EU. It also criticises western governments for their refusal to spend on new infrastructure to boost growth and confidence levels.
Such a move would make up for the abject failure since the financial crash of private companies to invest in new plant and machinery, and outside the tech field to try out new techniques and processes that would raise productivity and wages.
The OECD boss, Ángel Gurría, might expect the 34 countries that count themselves as members of his organisation to heed his advice and step into the space left by the private sector. After all, they pay his wages. Yet they are also too anxious to make more than token gestures.
He says the UK has headroom to spend without spooking the markets, but Hammond is not concerned about the markets. He is concerned about his electorate and the prospect that voters will consider him profligate if he goes on a spending spree. So the need to shore up weak public finances is likely to trump reports that private investment and employment have stagnated.
