The crisis worsens after the rise in the energy rate cap by 80%

First modification: 08/26/2022 – 21:51

This Friday, August 26, Ofgem – regulator of the British energy sector – reported that the maximum rate that energy providers will be able to charge users will be extended by 80% from the first day of October.

In this way, the figures will increase to 4,202 euros per month, a much higher cost than the current 2,325, causing an increase in the cost of living that deepens the economic crisis and sets challenges for the next prime minister.

This occurs in a framework where there is a power vacuum in the country after the resignation of Boris Johnson and when various sectors of workers opted for strikes as a method of protest to demand better wages to alleviate the difficult situation.

This new value, which is a consequence of the increase in gas globally due to the war in Ukraine, may be revised at the end of the year.

Jonathan Brearley, CEO of Ofgem, urged that the next British authority carry out “an urgent response to the continuous increase in prices”.

“We know the huge impact that this maximum rate increase will have on UK households and the difficult decisions that consumers will now have,” he said.

In addition, the head of Ofgem emphasized the “record levels” of the cost of energy due to “an aggressive economic act of the Russian State.” “It has slowly and deliberately cut off gas supplies to Europe causing damage to our homes, businesses and the economy in general,” he said.

“Ofgem has no choice but to reflect these cost increases in the maximum price,” he concluded.

Exceptional measures pending the new premiere

The Executive’s response so far has been weak. With the new conservative leader undefined, the rest of the government does not want to take action and reaffirmed that it will be Liz Truss or Rishi Sunak – the contenders to be the new premiere– those who have to deal with this issue when they take office on September 6.

The Minister of Economy, Nadhim Zahawi, warned of the discomfort that this price increase will generate in the population, but warned that “help is on the way”, referring to the policies that will be set when there is a prime minister.

However, specialists estimate that year-on-year inflation, which is currently at 10.1%, may reach more than 13% in December. To deal with the situation, the Bank of England raised interest rates from 1.25 to 1.75%.

The London Stock Exchange suffered a relapse of 0.70% at the close of this Friday after the trigger of the maximum charge in the energy category was known.

with EFE