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Tuesday, September 27, 2022

Biggest rise in British energy bills takes effect pushing 2.5m more into fuel stress – business live | Business

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Millions of households across Great Britain will pay more for their gas and electricity bills from today as the biggest ever increase in energy bills takes effect.

Ofgem’s price cap has risen by 54% to reflect higher wholesale energy costs that are now being passed onto consumers, adding to a growing cost-of-living crisis.

The Resolution Foundation, a thinktank, said the number of English households in fuel stress would double overnight from 2.5m to 5m.

A gas hob burning on a stove in a kitchen in Basingstoke, Hampshire.

A gas hob burning on a stove in a kitchen in Basingstoke, Hampshire. Photograph: Andrew Matthews/PA

Energy price pressures are only likely to get worse because of Russia’s invasion of Ukraine and threats to Europe’s gas supply. Russia is a major supplier to countries such as Germany and President Vladimir Putin on Thursday said European customers would need to pay for gas in roubles, although the details of the order appear to let buyers continue to use euros or dollars, for now.

Jonathan Marshall, the Resolution Foundation’s senior economist, said:

Another increase in energy bills this autumn hastens the need for more immediate support, as well as a clear, long-term strategy for improving home insulation, ramping up renewable and nuclear electricity generation, and reforming energy markets so that families’ energy bills are less dependent on global gas prices.

Citizens Advice said around five million people would be unable to pay their energy bills from April, even accounting for the support the Government has already announced, the Press Association reports.

It warned this number would almost triple to one in four people in the UK – more than 14m – if the price cap rises again in October based on current predictions.

Energy prices are not the only thing that are rising: a poll by the British Chambers of Commerce has found that more UK businesses are preparing to raise prices than at any time since the 1980, likely further stoking inflationary pressure.

When firms were asked by the BCC what pressures they were facing to raise prices, 92% of manufacturers cited raw materials, while 56% pointed to energy and transport costs among other overheads.

It is all adding to the pressure on the government, which faced a slew of negative headlines following chancellor Rishi Sunak’s spring statement. The statement was perceived as doing little to tackle the biggest expected fall in living standards since the 1950s.

The agenda

  • 10am BST: Eurozone inflation (March; previous: 5.9%; consensus: 6.6%)
  • 1:30pm BST: US non-farm payrolls (March; prev: 678,000; consensus: 490,000)

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