Fears deflation will knock global recovery off course

With oil prices on a seemingly never-ending slide, China, Europe, and, Indeed, Ireland wait to see the ramifications, writes Kyran FitzGerald.

before Christmas, a friend of mine got a bit of a shock. Having filled his petrol tank, he examined his bill. It was lower than expected. He panicked, thinking that he had mistakenly put diesel in his car. Happily, he soon discovered that his fears were misplaced. The drop in oil prices has been both welcome, but also and for some, unsettling.

Last week, it emerged that across the eurozone, consumer prices had actually fallen in December by 0.2% compared with the previous December. This is the first time since 2009, in the immediate aftermath of the financial collapse, that a drop in prices across the zone has been recorded.