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28 Aug, 2022 11:41

Soaring energy prices could cost UK billions – Guardian

Helping British households will be one of the most urgent challenges for the government
Soaring energy prices could cost UK billions – Guardian

The UK government may have to spend an additional £23 billion ($27 billion) in subsidies to cover surging energy bills over the upcoming heating season, The Guardian reported on Wednesday, citing a research paper by the Institute for Government (IfG).

The institute now forecasts Brits having to fork out £900 more per household this winter than the previous estimate from May.

Moreover, as bills are expected to soar further, subsidies are likely to jump to £90 billion ($106 billion) next season, the IfG believes.

Energy prices have risen sharply again in recent weeks and are now expected to stay higher for longer than previously expected. Deciding whether and how to help households and businesses with these costs will be one of the most urgent tasks facing the new government,” Olly Bartrum, one of the analysts behind the IfG report, was cited as saying.

He noted that this may require “substantial extra spending,” as “even limiting help to the most vulnerable could cost several billion pounds.

The government should also do more to encourage greater energy efficiency and reform energy markets to reduce vulnerability to high energy prices if it wants to avoid further expensive support packages in a future likely to be defined by highly volatile energy prices,” Bartrum concluded.

UK’s energy regulator Ofgem earlier this year hiked the energy price cap to nearly £2,000 due to a sharp rise in global energy prices. The next cap hike, which will take effect in October, is scheduled to be announced on August 26.

For more stories on economy & finance visit RT's business section

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