New data from the consultancy Baringa Partners shows that over half of UK households may fall into “energy poverty” this winter. Energy suppliers too are now at risk as rapidly rising bills are building up a rising level of debt which they may not be able to repay.
According to the report, the effects of the energy crisis this winter could dwarf the effects of the global financial crisis. Currently it is predicted that energy bills will increase by approximately 80% beginning in October as colder weather begins to increase demand and tighten energy supplies, which will already be strained due to reduced Russian supply of gas to Europe. From there, winter energy bills are expected to blow up to more than 300% of what they cost last year.
James Cooper, a partner at Baringa said, “The impact to society will be higher than the 2008 crash in terms of the impact on households. We’re now moving into territory where a majority of households are placed into debt or a very fragile financial position.”
It is predicted the average annual household energy bills will exceed £3,500 ($4,143) starting October 1. That is more than 11% of median household disposable income according to Office of National Statistics data.
Even the National Health Service is warning of a coming “humanitarian crisis” of ill health, and excess deaths if something is not done to ease rising energy bills before a winter which could see some going without heat, or other basic necessities.
The Daily Financial Trends
