Britons were hit Friday by a massive spike in energy bills, compounding the country’s worst cost-of-living crisis in decades.
Some 22 million households will see their annual bills rise to around €2,000 ($2,626) after the UK energy regulator raised its price cap by 54% – the biggest jump since it started capping increases. prices in 2017.
The ceiling sets a price cap that suppliers can charge per unit of energy.
The increase will double the number of English families living in “fuel stress” — defined as those who spend at least 10% of their total budgets on energy bills — to 5 million, according to the Resolution Foundation.
“This is the biggest energy price shock in memory,” Adam Scorer, chief executive of National Energy Action, a fuel poverty charity, said in a statement Thursday.
“Millions of people will be harmed by adequate levels of heat and energy. Despite all the anticipation of these price increases, many people with lower incomes will be overwhelmed by reality.”
Britons’ bills had already risen 12% last October, the last time the price cap was adjusted, after a global natural gas supply crisis pushed wholesale prices to record levels.
The government has tried to ease the pain by cutting local taxes and fuel fees, as well as allowing many consumers to spread the cost of their bills over the next few years.
But further increases could be on the way in October. Russia’s invasion of Ukraine in February is worsening the situation, pushing up energy prices even further, the Bank of England said last month.
Estimates vary as to the scale of the next shock, but investment bank Investec expects annual energy and gas bills to reach £3,000 ($3,941).
The Resolution Foundation, a think tank which focuses on living standards, estimates the number of English families with fuel stress could reach 7.5 million – nearly a third of all households – after October, if annual bills rise to €2,500. ($3,282) in the fall.
“Another increase in energy bills this fall accelerates the need for more immediate support,” Jonathan Marshall, senior economist at the Resolution Foundation, said in a press release.
Marshall said rising prices require a reform of “energy markets so that household energy bills are less reliant on global gas prices.”
The opposition Labor Party has reiterated its call for a tax on windfall profits made by oil companies such as BP and Shell, thanks to gains in global oil prices.
Source: CNN Brasil
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