Millions of households in the UK are urged to prepare for a prolonged double-digit inflation, which will last at least until the winter of next year. All of this will happen amid a staggering rise of electricity bills in the fall, what will be the largest deterioration of the standard of living in the country since the 1950s, writes Daily Mail.
Experts say that inflation in the United Kingdom can remain above 10% all over and even after 2023. According to the forecast economist Robert wood, already rising costs of population increase, even if the heads of the Bank of England will raise interest rates.
The British regulator Ofgem raised the price cap on energy by up to 80% in October will lead to the increase in the average annual accounts from £1971 to £3549. As a result, a jump of 6 million British households could lose their savings.
But, according to the Daily Mail, next year, things could get worse. The experts consulting company Auxilione predict that in January, the price of energy will increase by 52% to £5405, and then in April, a further 34% to £7263.
Executive Director of Ofgem Jonathan Brearley acknowledged that the rise in price of energy will create difficulties for people in the UK who require “extra urgent action” from the government. However, he added that next year prices are “significantly worse”.
Reporters asked Brearley, Ofgem why not protect consumers through lowering the price threshold. The official said that the measure will lead to the fact that companies will not be able to reimburse the money they spend on energy, and ultimately they will not be able to function.
The founder of MoneySavingExpert Martin Lewis has called the current situation “catastrophic.” “If we don’t achieve further state regulation measures in addition to those that were announced in may, that this winter will be lost of life”, — said the expert. He also predicted the popularity of the movement Don’t Pay, the members of which refuse to pay my bills.
Managing Director energy giant EDF Philip Compare warned that due to the rapid price growth in January, half of British households could face “fuel poverty”. At the same time, the trade Union Congress said that in the last three months of this year, electricity bills will rise to 35 times faster than wages, and 57 times faster than manual.
The Company Which? called on Ministers to increase the benefits of electricity by at least 150%, otherwise millions of Britons are facing “financial collapse”. Nevertheless, the government was not going to announce immediate additional assistance while tori is not defined with the successor Boris Johnson, drew attention to the Daily Mail.
The Chancellor of the exchequer Nadhim Zahavi said that the decision Ofgem will cause people to “stress and anxiety”. The Minister urged citizens to ration consumption and simultaneously accused Vladimir Putin what he called “the increase in energy prices in retaliation for the British support to the courageous struggle for freedom.”
Boris Johnson said that in September, the government announced the allocation of “extra money” to support households during the energy crisis. He also suggested that eventually the account will be reduced to the extent that, as the ability of the Russian President “to blackmail and influence” the United Kingdom and the rest of the world “decrease”.
But the labour leader Kir Starmer accused the Cabinet of Ministers that they “idle” during the escalating crisis. “You have two candidates in leaders who are arguing with each other about how awful they behaved in the government, but none of them came up with any solution to this problem. It is inexcusable” — said the politician.
Executive Director of the Association Energy UK Emma Pinchbeck said the new threshold will be “really scary” for many people and businesses. A similar opinion was expressed by the shadow Chancellor of the exchequer Rachel Reeves. According to her, the British “terribly concerned” by the events and the situation of “strikes fear into the hearts of families across the country.”
The leader of the liberal Democrats ed Davey has suggested that the increase in the price threshold will be “nothing short of a disaster” for millions of households. “The only option is to freeze energy prices until this increase will harm our communities. Then we need a proper plan to lower bills for next year,” he said.
“While millions suffer, the conservatives are not doing anything. There is no any government policy or plan from Liz Runs or Rishi Sunak. They have no idea the pain you will cause our country, these energy prices. They are simply unable to manage,” added Davey.
The Chairman of the Parliament Committee on business, energy and industrial strategy Darren Jones also warned that due to the increase in energy prices, “a company will face bankruptcy”. In the end, the next government will have to provide business grants, not just a temporary reduction of taxes or rates.
The first Minister of Scotland Nicola Sturgeon said that the increase in energy prices “simply can’t afford millions” of Britons and should be abolished. And the local energy Minister Michael Matheson suggested that Ofgem decision will lead to massive “fuel poverty”.
The threat of impoverishment “hanging over the country like the sword of Damocles,” says the Director of the charity Feeding Britain, Andrew Forsey. “If the new Prime Minister will not offer significant additional assistance, these mind-boggling prices will uncover a vicious trap of hunger, resulting in millions of families can’t afford heating or food,” he said.
However, some paints an even gloomier picture. According to the head of charity Turn2us Thomas Lawson, the rapid increase in prices will lead to the fact that many of the Brits don’t have a choice between eating and heating — they can’t afford neither.
“It’s such a serious emergency situation, as the impact of the coronavirus, and it requires the same confident the government’s response. Since we are one of the richest economies is simply not an option to plunge more than a quarter of the population in poverty,” said Lawson.
Some experts also note that the crisis will hurt the most vulnerable part of the population. First and foremost, we are talking about large families, the disabled and seriously ill people, says the Daily Mail.
“We are increasingly turning frightened families who are reaching a critical point. Some parents come to us in tears, horrified at the thought of how they will feed their children. Some don’t pay on time for the lease to have their children could eat. One family even decided to remove the seat from the car to save on fuel. Many of these families have reduced their costs to a minimum, and they have nothing to reduce,” he told the publication, a spokeswoman for the charity Action for Children Rosana Tragen.
“The cost of charging the wheelchair or the use of a breathing apparatus for the year will nearly triple. Our phones are flooded with requests from people with disabilities who do not know what to do, and who feel that they are being punished for what they consume more energy,” — said the representative of the charity Scope That Marsland.
“Today’s rising energy prices, a blow to household budgets and will lead many households to the fuel poverty. Ministers should immediately reverse this catastrophic increase”, — said the General Secretary of the trade Union Congress Frances O’grady.
Earlier, the Chancellor of the exchequer Zahavi said that the government “does not exclude anything” the issue of electricity bills. However, the Minister added that the freezing of the price ceiling does not provide “targeted assistance” to those most in need, finds the Daily Mail.