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UK Business Energy Bills Could Increase Fivefold From October

UK Business Energy Bills Could Increase Fivefold From October
05 August 2022
 

Some UK businesses might face bills five times their current price, due to global concerns over gas supplies and tight electricity markets in Europe.

According to data from Cornwall Insight, energy bills could rocket when new contracts are negotiated in October 2022.

Those who negotiated two-year fixed price contracts in the summer of 2020, are potentially facing a substantial fivefold rise in October, with those renewing an annual contract due to see bills twice what they paid this year, which in turn was double what had been seen during 2020-21.

 

Industrial Sector, Hospitality and Leisure Most Vulnerable

 

October’s increase, coupled with other market concerns such as the volatility of gas supplies, could particular harm businesses whose profits are more vulnerable to energy cost increases, such as hospitality, leisure, retail and many in the industrial sector.

It is feared that energy costs could force business closures.

This comes as The Bank of England raises interest rates to 1.75 per cent, and inflation is set to hit over 13 per cent.

Robert Buckley, Head of Relationship Development at Cornwall Insight said: “We must think much harder about what this energy crisis is doing to business. This is not only to ensure we don’t see loss of output, but so we don’t see companies with heritage, roots in their communities and otherwise good prospects washed away. Such an outcome would have consequential impacts on real people and families not just company balance sheets and GDP statistics. Yet the level of action by government is surprisingly small given their wider economic agenda could be at stake.

“We are simply not having the essential conversations in Great Britain on relief for, or of, structured energy savings from businesses. We must ask ourselves whether we should be following the example of countries such as Germany, who are talking about the potential for rationing energy and taking energy savings measures now. 

Picture: a photograph of piles of silver coins. Image Credit: Pixabay

Article written by Ella Tansley | Published 05 August 2022

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