Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Gaza Government Media Office: This is a methodical use of aid as a tool of war to blackmail hungry civilians.
Gaza Government media office: Massacre committed by occupation today is a blatant war crime under international law.
Al Mayadeen's correspondent: Waves of injured and martyrs continue to arrive at Nasser Medical Complex following the horrific massacre near the aid distribution centers in Rafah.
Al Mayadeen's correspondent in Gaza: 30 martyrs and 120 wounded by Israeli fire while heading to a 'US aid distribution site' west of Rafah.
Araghchi to Grossi: These parties will bear responsibility for the consequences of their actions
Araghchi to Grossi: Iran will respond to any unlawful action by European countries or parties attempting to turn the Agency into a tool for achieving their objectives
Araghchi to Grossi: We urge the Agency to warn against the consequences of any political move against Iran
Araghchi to Grossi: We call on the Agency to highlight Iran’s full cooperation during the upcoming Board of Governors meeting next week
Araghchi to Grossi: We demand that the Agency reflect the facts in a manner that prevents certain parties from exploiting it to advance their political agendas
Iranian Foreign Minister Abbas Araghchi holds a phone call with IAEA Director General Rafael Grossi

UK announces 80% increase in energy bills as the economy deteriorates

  • By Al Mayadeen English
  • Source: Agencies
  • 26 Aug 2022 10:43
  • 3 Shares
5 Min Read

Britain announced Friday a vast 80-percent hike in electricity and gas bills, in a dramatic worsening of the cost-of-living crisis before winter as the UK awaits a new leader.

  • x
  • EDF energy plant (EDF)
    EDF energy plant (EDF)

Regulator Ofgem said its energy price cap, which sets prices for consumers who are not on a fixed deal with their supplier, will in October increase to £3,549 ($4,197) per year in the UK from the current £1,971, blaming soaring wholesale costs on the war in Ukraine.

'Everybody's gonna have trouble'

Increasingly cash-strapped Britons learned how much their electricity and gas bills will rise in October, as the regulator unveils its latest energy price cap that could tip millions into fuel poverty and amid soaring international wholesale gas prices.

Gas comprises a major part of Britain's energy mix, with tens of millions of homes relying on gas-powered boilers for their heating. From 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. 

Household and business consumers, energy suppliers, and opposition politicians are clamoring for urgent government action to avoid putting the most vulnerable in desperate situations.

"Everybody's gonna have trouble," pensioner Diane Skidmore told AFP on Thursday, as she prepared to turn off her heating and use blankets and jumpers to try to keep her rocketing bills down. 

Outgoing Prime Minister Boris Johnson has vowed to leave major financial decisions to his successor, who will be announced on September 5 following a summer-long Conservative party leadership contest dominated by the cost-of-living crisis.  

Foreign Secretary Liz Truss, the overwhelming favorite to beat rival Rishi Sunak, has stated that she favors tax cuts over direct "handouts".

But 72-year-old Skidmore, who lives in social housing in south London and tries to survive on monthly earnings of £600, branded the plans as "ridiculous", adding, "We need to have people pay more taxes so we can have a country functioning." 

Any chance of recovery?

Related News

CNBC unveils strategic plan to revitalize Syria energy sector with US

Syria to sign deal to import electricity from Turkey, minister says

Britain is already suffering from its highest inflation rate since 1982 and is predicted to enter a recession later this year. 

Anti-poverty think-tank The Resolution Foundation has requested "radical" measures to prevent "a catastrophe" this winter, warning of "serious physical and financial damage to families across Britain."

The foundation predicted thousands could see their energy cut off entirely with many poorer households relying on more costly pre-payment meters; "millions will be unable to pay bills and (will) build up unmanageable arrears," it added.

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.”

The University of York has estimated that 58% of UK households are at risk of fuel poverty by next year. Consumer prices are rising around the world as countries emerge from pandemic lockdowns and in the aftermath of the Ukraine conflict, which is exacerbating already high energy costs.

"We estimate that by 2022 our default provisions will be three times higher than in a normal year," EDF Energy's (a UK energy provider) managing director for UK customers Philippe Commaret told AFP on Thursday. "I would say that about a third of our customers are in fuel poverty and a further 20% could become so."

Despite the current government inaction, Business Secretary Kwasi Kwarteng, who is tipped to become finance minister if Truss wins power, has been holding meetings with energy suppliers, promising last week that "help is coming," without providing further details. 

Former Finance Minister Sunak has criticized Truss's economic policies as "fairytales" and argued tax cuts will worsen inflation and increase the likelihood of a recession.  

He has noted slashing taxes will not help those on the lowest incomes, who do not pay taxes and has instead proposed further direct support. It would supplement government help already on the way, including £400 being taken off every household's energy bill later this year.

Government stimulus relief 

The leader of the main opposition Labour party, Keir Starmer, has called for a freeze in energy bills at the current cap rate and Scottish Power, one of the country's largest electricity suppliers, is also proposing a two-year freeze, which would cost a whopping £100 billion.

The plan would see the government guaranteeing loans to the energy companies, enabling them to keep bills frozen while still paying the higher prices for wholesale gas.  

EDF, as well as the manager of nuclear power stations, has backed the plans for a deficit fund, which would be repaid through bills over the next 20 or so years.

Other proposals include direct payment to consumers of £1,000 or a "solidarity tax" of 1% on all earners to help pay for extra support with soaring energy bills. Calls are also mounting for more energy-saving efforts, which are being pursued in mainland Europe but have been largely absent from the public debate in the UK. Meanwhile, the Federation of Small Businesses has noted smaller firms are also suffering greatly from the crisis, and need their own targeted support.

Read more: 10,000 people in UK will die this winter due to energy crisis: NHS

  • Energy crisis
  • inflation
  • Gas prices
  • UK

Most Read

President Donald Trump and Israeli Prime Minister Benjamin Netanyahu arrive to a news conference in the East Room of the White House, Tuesday, Feb. 4, 2025, in Washington (AP)

Rift widens: Trump, Netanyahu clash in heated phone call over Iran

  • Politics
  • 26 May 2025
US judges quietly consider private security amid Trump tensions

US judges quietly consider private security amid Trump pressures

  • US & Canada
  • 25 May 2025
An Israeli army vehicle moves in the Gaza Strip as seen from southern occupied Palestine, Thursday, May 29, 2025 (AP)

Hamas rejects Witkoff ceasefire plan, says alters terms

  • Politics
  • 29 May 2025
Spokesperson for the Yemeni Armed Forces, Brigadier General Yahya Saree, announces a new operation against Ben Gurion Airport on May 29, 2025 (Yemeni Military Media)

Yemen announces successful hypersonic missile strike on Ben Gurion

  • Politics
  • 30 May 2025

Coverage

All
War on Gaza

Read Next

All
MIT bans class president who gave pro-Palestine speech
US & Canada

MIT bans class president over pro-Palestine speech

Arab ministers condemn Israel 'ban' on planned West Bank visit
Politics

Arab ministers condemn Israeli ban on planned West Bank visit

Major General Hu Gangfeng, Vice President, National Defense University, People's Liberation Army, China, leaves after a panel discussion during the 22nd Shangri-La Dialogue summit in Singapore, Saturday, May 31, 2025. (AP Photo/Anupam Nath)
Politics

China blasts Hegseth, calls US top 'troublemaker' in Asia-Pacific

US activists demand shutdown of Musk's 'dirty' supercomputer: Reports
Technology

US activists demand shutdown of Musk's 'dirty' supercomputer: NBC News

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS