Discuss the likely impact of an oil price increase on the domestic preformance of the UK economy.?

This is an economics question for any1?Discuss the likely impact of an oil price increase on the domestic preformance of the UK economy.?
Assuming the UK is not self-sufficient in oil, an increase in the oil price will act like a huge tax, making virtually everything more expensive to produce. This will induce cost-push inflation.





As time goes by, some of this may be mitigated as various parts of the economy substitute coal for oil, e.g. for power generation, but even so, oil has few substitutes for most of its applications.





This oil 'tax' is paid to oil exporting countries, not to other parts of the domestic economy. The result will be slower economic growth in the UK.