U.K. Energy Price Cap to Rise 80%, Regulator Says

“The pressure on stretched households will only intensify, and the calls for support will get ever louder,” wrote Martin Young, a utility analyst at Investec, a financial services firm, in a recent note to clients. Mr. Young expects another jump, to £4,210, in January.

Consumer prices in Britain rose 10.1 percent last month from a year earlier, the fastest pace in 40 years, squeezing household budgets. The Bank of England has predicted that inflation would peak at 13 percent in October as the new energy prices turn up in household bills. Other estimates are higher; analysts at Citi have said the rate could reach as high as 18 percent next year.

The price hikes and how to deal with them have become a hot subject of political discourse in Britain and across Europe. While the British government has offered a package that includes £400 per household to help residents with soaring bills, a wide range of politicians, consumer advocates and energy executives now say that more forceful intervention is needed to cushion households from the surge in energy costs.

Recently, Britain’s opposition Labour Party said that it would freeze energy tariffs where they are now, paying part of the £29 billion cost by increasing the so-called windfall taxes that the Conservative government imposed earlier this year on oil and gas giants operating in the North Sea.

Article source: https://www.nytimes.com/2022/08/26/business/uk-energy-price-cap.html