The UK faces potential energy shortages as wholesale gas prices surge, with experts warning of possible three-day working weeks for affected industries this winter. Business Secretary Kwasi Kwarteng has dismissed 'alarmism' but acknowledged that prices 'could be high for longer than people anticipate'.
Wholesale gas prices have risen 250% since January and 70% since last month, driven by a perfect storm of factors: increased demand as economies reopen post-pandemic, reduced Russian supply, high Asian demand, North Sea maintenance closures, damaged French electricity cables, and low wind speeds. This has pushed smaller energy suppliers to the brink, with five already collapsing.
Kwarteng told MPs there would be 'no rewards for failure' and no government bailouts for poorly managed firms. However, support is expected for bigger suppliers to take on customers from failed companies. The energy price cap is likely to rise sharply, potentially doubling household bills by next spring.
The crisis has knock-on effects beyond energy. Fertiliser plants have shut due to high costs, disrupting CO2 supplies used in food processing and medical procedures. One consultant warned the situation could 'easily see a three-day working week' across affected sectors, echoing 1970s-style disruptions.
Prime Minister Boris Johnson compared the economic recovery to a 'big thaw', saying the government is 'working very hard to find a way through'. He stressed the need to transition to clean energy sources.
