Inflation: UK energy price cap rises by 80%

Inflation: UK energy price cap rises by 80%

This measure further accentuates inflation in a country in the midst of a cost of living crisis and facing major strike movements.

The energy price cap will rise by 80% from October in the UK, further stoking inflation amid the cost of living crisis and putting pressure on the government to act.

This ceiling will rise from 1,971 pounds per year per average household to 3,549 pounds, Ofgem, the British energy regulator, announced on Friday due to the rise in global gas prices, particularly since the war in Ukraine.

“Modest” benefit for energy providers

The increase reflects the continuing rise in global wholesale gas prices, which began with the lockdowns after the Covid pandemic, and were pushed to record levels as Russia slowly cut gas supplies to Europe.“, argues Ofgem.

This threshold, calculated on the basis of the average wholesale gas prices of the previous months, experts expect to rise to more than 4,000 pounds in January and up to 6,000 pounds in the spring according to the most pessimistic projections, which should fuel inflation. already at more than 10% per year in the UK. “We are aware of the huge impact this maximum price increase will have on households in Britain and the difficult decisions that consumers will have to make.commented Jonathan Brearley, CEO of Ofgem. Ofgem clarifies that the cap provides for a “modest“profit for energy providers in energy sales to households, but that”unlike power producers, most distributors currently do not make a profit“.

Economy and Finance Minister Nadhim Zahawi also acknowledged that “The energy price cap announcements will cause many people stress and anxiety, but help will come with £400 off energy bills for everyone, £650 for vulnerable households and £300 for retirees.“.”As (Russian President Vladimir) Putin raises energy prices in retaliation for our support of Ukraine’s valiant fight for freedom, I am working tirelessly to develop new aid.“He assured, a few days before the announcement of the name of Boris Johnson’s successor in Downing Street.

everyone is going to have a bad time»

Diane Skidmore, a 72-year-old pensioner living in social housing in south London on £600 (just over £700) a month, has seen her monthly bill fall from £25 to £45 in no time. more than a year. She just received a letter from her energy provider asking her to plan for the next 70 pound flow rates. “everyone is going to have a bad time“, he told AFP, saying his intention to wear sweaters and blankets to minimize his energy consumption. However, she says she is worried about her neighbors whose electricity meter works with prepayments: “they are always in debt, and suddenly they do not pay the rent but they cut off their electricity and gas“.

Outgoing Conservative Prime Minister Boris Johnson has decided to leave this politically sensitive issue to the next head of government, whose name will be revealed on September 5. The favorite to replace Boris Johnson, Thatcherite Liz Truss herself, had until then favored tax cuts over direct aid, which she often describes as “bandagesOn Friday, he seemed to soften his position, in a column in the Daily Mail: “If I am elected Leader of the Tory Party and Prime Minister, I will take decisive action to reach Downing Street with immediate help, but I will also tackle the root of the problem.“.

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