British factories face risk of closure due to high electricity bills
A research study led by MakeUK, the British Manufacturers Association, indicates that 6 out of 10 British manufacturers are at risk of closing due to soaring electricity bills, which have peaked at a 100% increase.
Bloomberg reported that 6 of 10 factories in the UK are facing closure due to soaring energy bills.
The agency quoted the results of research led by the British Manufacturers Association MakeUK, which found that nearly half of UK manufacturers have experienced a jump in electricity bills of more than 100% in the past year.
Gas comprises a crucial part of Britain's energy mix, with tens of millions of homes relying on gas-powered boilers for their heating. Starting January next year, average bills could top £5,000 according to some projections, as Ofgem updates the cap every three months rather than the previous norm of twice a year.
Ofgem had also previously announced that the energy price cap will be raised by 80% starting October 1, and the average gas and electricity bill will be £3,549 a year.
Probably the most important number to watch right now: the wholesale price of natural #gas (well off the peaks that prompted some of the scariest forecasts for UK #inflation, though still high)... #energycrisis— Julian Jessop 🇬🇧 🇺🇦 (@julianHjessop) September 2, 2022
ps. you can track the data yourself here: https://t.co/1AxuOaG4C1 pic.twitter.com/uZsCKzWUZ4
A research conducted by IMF, the agency found that the energy crisis was affecting British family budgets more than any other country in Western Europe.
The research also noted that compared to other European countries, Britain has a far wider disparity in the cost burdens placed on low-income and wealthy families. This was ascribed to the UK's high reliance on gas to create energy and heat houses during a period of surging gas costs. The IMF also notes that the UK has the least energy-efficient housing in Western Europe.
The UK economy contracted by 0.6 percent in June and decreased 0.1 percent between April and June, compared to a growth of 0.8 percent in the previous three months.
Christopher Dembik, head of macro analysis at Saxo Bank, said that “What Brexit has not done by itself, Brexit coupled with Covid and high inflation have succeeded in doing,” adding that “The UK economy is crushed.”
Health experts have also warned the government of a potential "humanitarian crisis" due to the sharp increase in energy prices.
The National Health Service, which brings together a number of public health organizations, said that “many people could face the awful choice between skipping meals to heat their homes and having to live in cold, damp, and very unpleasant conditions."
An NHS chief has warned last month that soaring energy costs will kill more than 10,000 people this winter; a situation the NHS Confederation referred to as a "humanitarian crisis".
The International Monetary Fund (IMF) has warned that the UK faces the slowest rate of growth in the G7 next year.