Only an ‘un-conservative’ measure can solve the energy crisis

The UK economy has so far held up reasonably well in the face of the rise in energy prices. But the latest data suggest a weakening has begun and the economy faces an enormous potential further shock.

For households, the latest price cap announcement means a rise in energy bills of around 80 per cent to £3,549 per year — a bill totalling £99 billion. This is equivalent to a rise in the standard rate of income tax of nine pence in the pound. And this is by no means the full extent of the shock, with projections that the price cap might rise much further, to around £6,000 per year at the start of 2023.

Businesses also face a nasty surprise. Obviously, energy-intensive industries like metals and fertilisers have particularly acute problems. But many tens of thousands of small businesses, employing millions, are also facing bills that are triple or quadruple the previous levels.