Article

It’s gonna be a cold, cold Christmas

9 December 2021
It’s gonna be a cold, cold Christmas
Zurich, Switzerland

Will the cold, cold Christmas that Dana forecast in her 1975 hit arrive again this year?

Gas and electricity prices have risen sharply in the UK and elsewhere in Europe over the course of the past year on the back of a dramatic rise in natural gas prices.

This has forced the regulator to push through a sharp rise in the gas and electricity tariff price cap, which is set twice a year and affects over half of UK households.

After the recent hike, prices are up nearly 23% year-on-year. Based on current forecasts, they could increase to over 40% year-on-year at the next review in February.

Against this backdrop, it’s going to be an increasingly tough and potentially cold winter for lower income households in the UK, particularly for those that have lost the £20 Universal Credit uplift.

Figure 1. Rising utility bills provide little Christmas cheer for households

Source: Datastream, Ofgem and Barclays Research as of 19 November 2021. *Based on the prepayment price cap (introduced April 2017) from April 2018 – December 2019 and the Default price cap (introduced January 2019) thereafter. Forecasts from Barclays Research.  

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