Britain’s winter of discontent looks to be getting worse as the price of wholesale gas surged by 20 per cent in a day to record levels yesterday – and is now 500 per cent higher than the start of 2021 – as it was revealed families face paying £1,700 more for energy by April and an extra £1,800 for other essentials by Christmas.
Millions are facing a financial squeeze thanks to inflation driven by labour shortages, rising energy costs, a lack of HGV drivers and gaps in global supply chains – but the Prime Minister dismissed cost of living fears at the Conservative Party conference and insisted it was not his job to ‘fix every problem in business’.
Yesterday the price of gas reached 300p per therm – the first time it has reached that level – as concerns about supplies from Russia and predictions of a cold winter in Europe pushed the price up by a fifth in 24 hours. The price was 150p a month ago and below 50p from February to May.
Experts believe that if gas remains at this level, which is now predicted, the average household energy bills could jump by as much as a third or £420 to almost £1,700 a year from April.
Families who have already endured Covid-related uncertainty over last 18 months face a triple-blow of rising energy bills, soaring food prices and incoming tax hikes all fuelling inflation. Experts also predict that interest rates may rise faster than predicted to combat inflation, pushing up the price of mortgages and other borrowing.
Phil Hewitt of EnAppSys, the consultancy, said: ‘This (gas) price level is currently the price for the whole of winter. This is extreme pricing’. Thomas Rodgers of Icis, the price reporting agency, said: ‘The European market is entering the winter with record low stocks. Over the past few days we’ve had weather forecasts in Europe turn colder and more settled, so this means more demand for heating and power generation on the way’.
Compounding fears that a cost of living crisis is arriving, global oil prices globally also jumped to a three-year high of $83 a barrel.
Today exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) reveals how inflation will cost the typical family of four an extra £1,800 by the end of this year, while a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900.
Meanwhile, a Money Mail poll today reveals that one in two households have already started making cutbacks due to concerns over the rising cost of living.
But while many Britons are fear a financial hit, Prime Minister Boris Johnson yesterday insisted that he is not worried about rising prices because he believes they will be temporary, and insisted it is ‘not his job’ to fix every aspect of supply chains in the UK.
Asked about the situation during the Conservative Party conference, he told the BBC: ‘Actually I think that people have been worried about inflation for a long time and it hasn’t materialised.’
When pressed on the UK’s HGV driver shortage he attempted to deflect attention back to the private sector, saying ‘it’s not the job of government to come in and try and fix every problem in business and industry’.
Referencing Margaret Thatcher’s 1980s dictum – which ironically she used to stress the need to control inflation in a market economy – Mr Johnson said: ‘In a famous phrase, there is no alternative. There is no alternative.
‘The UK has got to – and we can – do much, much better by becoming a higher-wage, higher-productivity economy.’
But he admitted that Christmas might only be better from a ‘low base’ amid fears of ongoing shortages – after it was effectively cancelled during the pandemic last year.
Furious business chiefs accused the Prime Minister of ‘buck-passing’, while cabinet ministers told MailOnline they were concerned about ‘complacency’ creeping in over inflation.
In a stark warning of the bumpy road ahead this winter, The Bank of England has already flagged that inflation could hit 4 per cent by the end of the year, while supermarkets say food prices could increase by 5 per cent.
The energy price cap has now also increased, pushing up bills for more than 15 million households by an average of close to £140 a year.
And the soaring cost of wholesale gas has seen many suppliers go bust – forcing millions of customers on cheap deals onto more expensive tariffs linked to the price cap.
Meanwhile, new figures show pump prices have hit 136.10p per litre, the highest level since September 2013.
As living costs soar across the country, consumer polls suggest as many as half of Britons have already started cutting back, fearing they may have to penny-pinch now in order to save up for what could be a pricey Christmas.
Others have started shopping early – hoping to beat the price rises – with Aldi’s already selling 1,500 frozen turkey crowns a day, while Christmas pudding sales are up 45 per cent.
A survey, carried out by Consumer Intelligence, found many had started to scale back spending within the last one to three months — with most fearing rising food and energy prices.
Meanwhile, analysis of price rises in the last year alone shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10, the price of a pint of beer is creeping close to £4 and a bottle of prosecco has risen 55p to £8.
The new month of October also marked the end of the furlough salary support scheme as well as the withdrawal of an extra £20-a-week for struggling households receiving Universal Credit.
It comes as in a flurry of interviews ahead of his keynote speech to Tory conference today, the PM denied that the country is in ‘crisis’, comparing the disruption to a ‘giant waking up’ and ‘creaking’ after the pandemic.