British energy regulator Ofgem is raising the price cap on power bills to a record high £3,549 ($4,189) starting in October. The price, which is currently £1,971 ($2,330), is expected to go even higher to £7,272 ($8,594) by next spring.
The cause of the skyrocketing prices is largely due to soaring electricity costs in Europe, which receives much of its energy supplies from Russia. European and British sanctions on Russian energy supplies have severely tightened the flow, effectively backfiring against European nations.
The brunt of the soaring costs are expected to be felt by middle and working-class households, and small businesses that cannot afford to pay the bills. By October, low-income households will not be able to turn on their heating without emptying out their bank accounts in the process.
Numerous energy watchdogs who spoke to Reuters warned that the cost of living in the U.K. continues to increase, but those affected most heavily by the prices are expected to live on the same salaries provided to them prior to the crisis.
Those already struggling will have a choice, be cold or starve.
One 59-year-old woman, who spoke to Reuters, who has kidney failure and relies on her personal dialysis machine, told the publication that if she is unable to turn her machine on at least five times a week and run it for 20 hours, she will die.
According to the Office for National Statistics, real earnings in the U.K. continue to fall with soaring energy prices. Economists at Citi warned that CPI inflation in the U.K. could go up as high as 18.6% in January – surpassing the stagflation of the mid-1970s when oil shocks sent gas prices skyrocketing.
Like the United States, Britain's CPI stands at a four-decade-high, which is being driven by the price of fuel and food prices, Zero Hedge reported.
The report said:
Last winter’s cap was £1,277, but that was before European leaders sanctioned the hell out of Moscow for the invasion of Ukraine. With the cold season just a few short months away, power prices are already at record highs as Russia’s Nord Stream 1 NatGas pipeline to the bloc experiences supply disruptions.
This winter could be one of the darkest in decades for U.K. households. The government has provided billions of pounds to support families, but that may not reduce the growing discontent.