Bad news for households in the UK. The British energy regulator, Ofgem, announced this Friday an increase in the annual cap that electricity and gas companies can charge households for the energy they consume. The figure jumps 80%, to 3,549 pounds, about 4,210 euros at the current exchange rate. The perspective is that the situation worsens in 2023, for which “urgent” measures are requested to stop the blow.
The price, which has more than tripled in two years, will be valid until December 31. At that time a new rate will be established. “Energy has reached record levels fueled by an aggressive economic act by the Russian state. They have slowly and deliberately cut off gas supplies to Europe causing damage to our homes, businesses and the economy in general. Ofgem has no choice but to reflect these increases of costs in the maximum price”, argued the CEO, Jonathan Brearley.
“We know the huge impact it will have on households and the difficult decisions consumers will have to make now,” he continued. The measure coincides with the absence of concrete measures by the Government, with Boris Johnson on the exit ramp after resigning in July. Hence, Ofgem has urged the next prime minister -Liz Truss or Rishi Sunak- to adopt “an urgent response to the continuous increase in prices”.
The Minister of Economy, Nadhim Zahawi, said today that the rise will cause “stress and anxiety” in people, but stressed that the Executive is working to find a way to help households and that “help is on the way”, in reference to the measures that the politician who will replace Johnson can adopt. In May, aid of 400 pounds per household was already announced, which will have an extra 650 euros for the vulnerable. It is included in a program of 21,000 million euros, financed in part by a tax on profits fallen from the sky of companies in the sector.
For now, the decision is expected to push up British inflation further, which currently stands at 10.1% but could reach 13% or more by the end of the year. “Energy prices could worsen significantly until 2023,” they point out from Ofgem. The consulting firm Auxilione anticipates that the new price limit could rise to 5,439 pounds (6,452 euros) in the first quarter of 2023 and reach 7,272 pounds (8,627 euros) in the second quarter, according to Bloomberg.
The cost of living crisis has caused numerous strikes in different sectors, including today’s British Post Office, longshoremen or railway workers, demanding a wage increase to deal with this situation.
