Heads Up, Britain: Energy Bills Are Citing a Long‑Term High Price Trend
CBI’s Tony Danker warns that the surge in energy costs is likely to stick around for a while
When Sir Tony Danker, the Director‑General of the Confédération des Industries Britanniques, spoke to Sky News this Thursday, he made it clear: the soaring energy prices are not just a one‑off hiccup. He suggested the government will act to soften the blow, but kept the door open for questions about the best approach.
- Government Action: The Chancellor might step in to smooth the steep rise, possibly by offering loans to energy firms.
- Long‑Term Outlook: Energy bills could stay high for “two to three years,” even as the economy struggles to recover.
- Workforce Concerns: Will wages grow fast enough to offset the higher bills? That remains the real worry.
Ofgem’s Price Cap Step‐Up
The energy regulator Ofgem has recently lifted its price cap by 54%. This move is set to touch millions of households across the UK.
Jonathan Brearley, Ofgem’s chief executive, said: “We know this jump will cause a lot of anxiety, especially for those on a tight budget. We’ll make sure energy companies help their customers however possible.” He also added that the regulator is working to stabilise the market and diversify energy sources to shield customers from future shockwaves.
Brexit: A Promise of Lower Gas Bills?
During the 2016 referendum campaign, Prime Minister Boris Johnson pledged that once the UK left the EU, gas bills would become cheaper. He promised about £2 bn a year in savings by letting the government remove the 5% VAT ceiling on fuel. However, the EU rules had blocked any VAT cuts below that threshold while Britain was a member.
Takeaway
In short: prepare for a streak of high energy costs that could last up to three years. Keep an eye on government plans, wage growth, and how energy firms and regulators respond. And remember—while rates may be stubbornly high, there’re still ways to make your electricity bill a little less of a pain.
