The UK is suffering from high energy prices. It is about to get worse

Tia Rutherford is concerned about her 3-year old son.

The UK is suffering from high energy prices. It is about to get worse

She started to serve Jacob breakfast in her room, as she was worried about the rising energy costs. She is worried that her son won't be warm enough and she can't pay her utilities.

Rutherford, a single mother of a 29-year old boy who lives in southeast London, said that there are "effects on his health." "He is constantly getting colds."

In the coming months, millions of people in Britain will have to make similar decisions. On Friday, energy costs for millions of households will rise by 54%. This is the second major jump in energy bills in October. A third could be coming as a result of rising demand due to the COVID-19 pandemic, and the war in Ukraine pushing prices for natural gas and oil higher.

Rising consumer prices are mainly due to rising energy costs. Inflation is a global problem, but it's more prevalent in Britain than its European gas-reliant neighbors. Utility bills and other costs have also risen, making it more difficult for them to control their rising prices . In the last year, natural gas prices, which are used for heating and electricity, have more than doubled.

Economists in the United Kingdom warn of the worst drop in living standards since mid-1950s. This is due to skyrocketing energy costs and food prices, as well as preplanned tax increases. According to the Office for Budget Responsibility, household disposable incomes will fall by 2.2% annually, after inflation is taken into account.

These figures do not show the extent to which low-income individuals are being affected by the crisis. According to the Joseph Rowntree Foundation (a think tank focusing on improving living standards), the poorest 25% of British households will see their real earnings drop by 6% because they spend more of their funds on food and energy.

People who depend on state pensions and government benefits are being squeezed twice because their annual cost of living adjustment was based upon September's annual inflation figures -- before consumer prices soared.

This means that benefits will rise by 3.1% this year. However, inflation rose to a 30-year peak of 6.2% at February. It is now expected to peak around 8% as war pushes food and energy prices higher.

People are shifting their beds closer to windows as costs rise. This allows them to read the streetlamps outside and is a way of reducing debt, according to outreach workers from Christians Against Poverty. Many people are becoming more concerned about suicide because of the pressures placed on them by their ex-husbands to skip meals in order to afford food for their children.

Gareth McNab is the charity's director of external affairs. "The cost-of living crisis is genuinely costing people lives." "Almost all calls to our new inquiries team mention the energy crisis and inability to cope. It's really dire out there.

As a result of an update to the national price cap, energy prices will rise for 22 million households on Friday. It is adjusted by regulators every six months. Analysts predict a third consecutive increase in the cap this year. This could lead to consumers paying more than twice as much for utility bills than they were one year ago.

Britain is more dependent on natural gas for its energy needs than other countries in the European Union, with less nuclear or renewable energy. Britain has also taken longer to seal its aging housing stock than its neighbours, which means that it requires more energy to heat them.

The country's largest natural gas storage facility was also closed five years ago. This left the country with a capacity of just 12 days, as opposed to about 80 days in Germany which is heavily dependent on natural gas. This means that Britain is more dependent upon gas purchases through "spot markets", which reflect short-term price swings.

Arun Advani, an expert on inequality at the University of Warwick, stated that while we use more energy to heat our homes in normal times than the Europeans, the price of heating is still low enough that it doesn't make a significant difference in living costs. "Now that energy prices have risen, people are paying more but we are paying much more. This makes the difference even more apparent."

However, some European governments have taken a more aggressive approach to reducing costs than Britain. France forced a state-controlled utility company to limit the increase in electricity prices to 4%. Spain has imposed a tax that will be passed onto consumers on windfall profits from energy producers.

In February, Britain responded with a package of 9 billion pounds ($11.8 billion), designed to offset rising utility bills. Rishi Sunak, Treasury chief announced additional measures last week including a reduction in vehicle fuel tax. He refused to impose a tax upon producers' windfall profits, or delay the planned 1.5 percentage point rise in income taxes. This was also scheduled for April.

Sunak stated that the government must keep spending under control in the face of uncertainty caused by war in Ukraine, and after the public debt reached its highest level since 1963.

Sunak was criticized by lawmakers of all parties for not getting the point. This suggests that he didn't understand the severity of the problem facing low-income individuals. He isn't letting up.

People who don't have much are trying to make do with less. Chris Price, a south London-based community charity called Pecan, said that clients of food banks are refusing potatoes and root vegetables, because they must be cooked.

He said, "People are saying that they need food that is easy to prepare and inexpensive because it can take up too much electricity or gas. "And they don't know if they can afford it."

These are also the people who were most affected by the pandemic, recent cuts to government benefits and the current crisis. They have little to fall back upon in the future, stated Adam Scorer, chief executive at National Energy Action, which is a charity that focuses on fuel poverty.

Scorer stated, "There is no cutting back. Scorer stated that smart decisions are impossible. You don't heat your house, you don’t use your stove, you don’t heat water and you don’t take a shower. These things are not possible because you don't have the money. Many people have no other options.

Rutherford is one such person.

A prepaid meter is her only way to get energy, and it's often the only alternative for those who are behind in their bills. Prepaid meters let customers control how much they spend but come at a high price and can be disconnected if they run low on credit.

She has struggled to pay her electricity supplier's debt, top up her meter and keep her son warm at night after he returns from daycare. She has tried to save electricity by switching off all lights and living in darkness except for tiny white Christmas tree lights.

She said, "I never had to live like that before." "I literally don't have any money, and my electric is going out."


 

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