Inflation is expected to be sent through the roof, with households facing at least a £3,000 spending squeeze this year. This inflation is predicted to triple the number of households experiencing “fuel stress” – meaning they are spending more than 10 percent of their household budget on energy. This has placed pressure on Chancellor Rishi Sunak to act to ease the growing energy crisis.
Basic household spending is predicted to increase by £2,440 when compared with the start of the pandemic.
This figure is exacerbated by a £600 national insurance hike along with other tax rises.
The Centre for Economics and Business Research (CEBR) have had to review their forecast just a month after initially making it, to account for the crisis.
Their updated report stated that: “The crux of the problem is that the government has underinvested in domestic energy security.
“It has made fossil fuel investment difficult without creating enough non-fossil alternatives, it has lacked storage and reserve supplies.
“In a forlorn attempt to prevent customers from having to cope with the consumer price consequences of all this, has imposed a ceiling on the price of energy.”
The report adds that as a result of this price ceiling, 24 energy suppliers covering more than 10 percent of households have gone out of business since September last year.