Goldman Sachs: Petrol prices to drop to £1 a litre in UK, predicts top economist Kevin Daly

Petrol prices could fall as low as £1 a litre in the coming months if oil prices remain low, providing some relief for consumers.

Falling oil prices would boost consumer confidence at a period when wage growth is still weak and the global economic recovery remains weak, according to Goldman Sachs senior economist Kevin Daly.

Daly predicted that petrol prices could fall to around £1.05 from their current average around £1.20.

The price of Brent crude has fallen more than 40% since the summer, reaching $66.50 a barrel on Tuesday.

"The men and women will really notice things such as the sharp decline in oil prices," he told the UK's Treasury Select Committee on Tuesday.

If oil prices remain at current levels, "we're likely to see a litre of unleaded petrol fall to between £1.05 and £1.10 per litre. That is a significant decline and I suspect...they will notice that more than they will the concerns over global growth," he said.

Meanwhile, concerns that slow growth in the Eurozone would affect the UK economic recovery were overblown, according to Daly.

"I think there's a distinction to be drawn between the negative impact that will come from sluggish growth, which we clearly have in the Eurozone, and the negative impact that comes from a full blown crisis, as we had in 2010, 2011 and 2012," he said.