Energy prices are set to soar in the UK and stay at high levels for years to come according to the head of the energy regulator Ofgem.
The average duel fuel bill in the UK is already £1,420 a year, up 19 per cent since 2009. But Ofgem warns that the UK’s over reliance on gas as coal, oil-fired and nuclear power stations are decommissioned, will push prices higher still.
Alistair Buchanan, chief executive of the regulator, says that falls in the UK’s power production capacity are likely to lead to the importation of more gas at a time when demand is growing across the globe.
He said that Britain would be “very tight” on power station capacity in three to five years’ time. “We’re going to have to go shopping in world markets at a time when they will be very tight [on capacity] themselves.
“There isn’t a single person or people to blame. In my view it was a single event – the financial crisis. Before the financial crisis the government had backed a visionary approach to energy on wind, water and nuclear… then came the financial tsunami.”
The impact of the “financial tsunami” is not limited to energy prices: many other aspects of household finance have been affected. In the last few years young families have faced soaring food costs, extortionate childcare fees, rising petrol and diesel prices, and in many cases the axing of child benefit.