Why the UK is facing an energy price crisis: Business Extra

The British people are looking at significant financial headwinds amid record levels of inflation

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Energy prices are set to increase more than 80 per cent in the UK before the end of this year on the back of rising wholesale gas and power costs.

Consumers and businesses have already been grappling with this trend for several months, as well as with inflation that has hit food prices (expected to jump another 12 per cent by next year) and the cost of other goods.

The high cost of energy is a global issue, with Britain's European neighbours also affected by the war in Ukraine and its effect on Russian exports.

In a very hot summer, drought measures are in place in parts of England.

Goldman Sachs forecasts a recession by the fourth quarter and the pound has been weakening against the US dollar as a result of a nosedive in sentiment. The fractious political landscape in recent years is both a cause and also the source of potential solutions to the crises the country faces.

Britain's Chancellor Nadhim Zahawi is travelling to the US this week to seek joint solutions to the cost-of-living crisis with leading bankers and government officials.

However, some consumers have said they will protest against the costs rather than pay them.

The National's London Bureau Chief Damien McElroy joins host Mustafa Alrawi to explain why the crisis has come about and discusses which direction the country might head next under such pressure, including the possibility of a radical shake-up of the social contract.

In this episode

The cost of living and the energy crisis in the UK (0m 15s)

The 'Brexit discount' and UK's readjustment (6m 58s)

Is politics a solution? (9m 22s)

UK government's help for individual and businesses (15m 01s)

Knock-on effect of the energy crisis (17m 48s)

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Updated: September 13, 2022, 3:58 AM