THE continuing fall in the price of oil is a positive move for the UK, the Bank of England has said.

Brent crude has dipped below 60 US dollars a barrel for the first time in five years.

The drop means the energy industry benchmark now down by about 50 per cent since the summer, amid concerns about weakening demand and oversupply.

But Mark Carney, Bank of England Governor, said the fall in price of oil was a "net positive development."

In a Bank financial stability report, Mr Carney said: "We should be clear that the 40 per cent-plus drop will flow quickly through to consumers and increase real disposable income and is a net positive for the UK economy."

However, Mr Carney also warned the fall presented risks to financial stability.

He added: "Geopolitical risks could intensify.

"Inflation expectations could be further depressed in economies, such as the euro area, where core inflation is already weak, slowing nominal income growth and increasing the burdens of debts."