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25 Aug, 2022 10:47

UK energy crisis may be worse than 2008 crash – Bloomberg

Surging utility bills threaten to sink more than half of British households into debt
UK energy crisis may be worse than 2008 crash – Bloomberg

More than half of UK households risk falling into energy poverty this winter, Bloomberg reported on Thursday, citing data from the consultancy Baringa Partners. Skyrocketing bills are also reportedly threatening power suppliers with rising debt that can’t be repaid.

The report warned that the crisis could have a bigger impact on households than the global financial crisis. Bills are set to jump by roughly 80% starting from October, when colder weather boosts energy demand. Winter energy bills are expected to be more than triple what they were last year.

“The impact to society will be higher than the 2008 crash in terms of the impact on households,” James Cooper, a partner at Baringa, told the outlet. “We’re now moving into territory where a majority of households are placed into debt or a very fragile financial position.”

Average annual household energy bills in the UK are forecast to exceed £3,500 ($4,143) from October 1. According to the Office of National Statistics, that amounts to more than 11% of median household disposable income.

The National Health Service warned this month that the UK could face a “humanitarian crisis” involving ill health, excess deaths and rising inequality if the government does not take urgent action on rising energy bills.

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