Bank of England warns energy prices driving inflation: comment
Comment on Bank of England warning of high energy prices fueling inflation
By Jess Ralston
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Commenting on a warning from Bank of England governor Andrew Bailey that high energy prices may be fuelling inflation, Jess Ralston, Head of Energy at the Energy and Climate Intelligence Unit (ECIU) said:
"When the Bank of England talks about high energy prices driving inflation, it means gas and gas prices will always be volatile as they are controlled by international markets.
"Prices have risen over recent months to a 16 month high [1] and as we've seen in previous years this has a knock-on impact on food prices. As long as we rely on gas for home heating and for some of our electricity generation, we'll be vulnerable to these price spikes - the International Monetary Fund [2] has said that the UK was so badly hit by the gas crisis because of this dependence, and the Energy Crisis Commission said that heavy reliance on gas for both heating and power left the UK ‘critically vulnerable’ to price spikes [3].
"Building out more renewables, installing electric heat pumps which will run increasingly off British renewable electricity as the North Sea continues its inevitable decline and insulating our homes is the way to protect households. More drilling for North Sea gas will not bring down prices."
Notes to editors:
1. https://tradingeconomics.com/commodity/eu-natural-gas
2. Energy crisis: UK households worst hit in western Europe, finds IMF: https://www.theguardian.com/money/2022/sep/01/energy-crisis-uk-households-worst-hit-in-western-europe-finds-imf
3. UK ‘dangerously underprepared’ for future energy crisis: Commission report: https://energycrisiscommission.uk/
For more information or for interview requests:
George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net