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Millions of households across the UK are paying more on their gas and electricity bills from today as the biggest increase in energy bills ever comes into effect.
Ofgem’s price cap has risen by 54% to reflect the higher wholesale cost of energy which is now being passed on to consumers and contributing to a growing cost of living crisis.
the Dissolution Foundationa think tank said the number of fuel-stressed English households would double overnight from 2.5 million to 5 million.
Pressure on energy prices is likely to increase due to the Russian invasion of Ukraine and threats to Europe’s gas supplies. Russia is a key supplier to countries like Germany, and President Vladimir Putin said Thursday European customers would have to pay for gas in rubles, although the details of the order appear to allow buyers to continue using euros or dollars for the time being.
Jonathan Marshallthe senior economist at the Resolution Foundation said:
Another rise in energy bills this fall is accelerating the need for more immediate support, as well as a clear, long-term strategy to improve home insulation, increase renewable and nuclear power generation, and reform energy markets to lower families’ energy bills depending on the global gas prices.
Citizens Advice said around five million people would not be able to pay their energy bills by April, even taking into account support already announced by the government, the Press Association reports.
It warned that figure would almost triple to one in four people in the UK – more than 14 million – if the price cap rises again in October, according to current forecasts.
Energy prices aren’t the only thing rising: a UK Chamber of Commerce survey has found that more UK businesses are preparing to hike prices than at any time since 1980, which is likely to keep heating up inflationary pressures.
When companies were asked by the BCC what pressures they were facing to raise prices, 92% of manufacturers cited raw materials, while 56% cited energy and transport costs, among other overheads.
All of this adds pressure on the government, which has faced a string of negative headlines following Chancellor Rishi Sunak’s spring statement. The declaration was felt to be little to deal with the largest expected decline in living standards since the 1950s.
- 10 a.m. CET: Eurozone inflation (March; previous: 5.9%; consensus: 6.6%)
- 13:30 CET: US nonfarm payrolls (March; before: 678k; consensus: 490k)