The GBP EUR exchange rate was unchanged on Thursday as traders considered the latest inflation reading. A slightly lower number took the steam out of the rate rise talk but higher numbers are inevitable later.
There was also a warning of energy prices rising in the UK for another 18 months. The UK is not the only country struggling with the fuel price issues as Europe’s largest economy, Germany could be staring at “a veritable economic crisis” from higher fuel bills.
The GBP to EUR was trading at 1.1865 near the latest yearly highs.
Expect 18 more months of rising energy bills, UK householders warned
The Chief Executive of Scottish Power has said that Britain’s gas crisis will keep pushing energy bills higher until 2023 and could leave only five or six of the strongest suppliers standing.
Keith Anderson said the UK’s record energy prices could mean households are hit by another 18 months of rising bills and that even well-run suppliers could go bust.
The only energy companies that could survive a fresh £4bn blow to the energy supply market would be a small number of players backed by multinational firms, he said, reversing years of competition in the market.
The UK’s energy market saw an increase from the big six suppliers that dominated from the days of privatization. That number grew to almost 70 companies at the start of 2021, however, soaring gas prices in the last two months has seen 13 suppliers going bust, leaving more than 2 million homes without a supplier.
“And in that time nothing has changed,” said Anderson. “I’ve seen nothing about what new regulation might look like. I’ve seen nothing about protecting vulnerable customers and the fuel poor.”
Scottish Power has called on the government and the regulator to prevent an energy market cull by adjusting the price cap to make it easier for suppliers to pass on the fast-rising energy costs.
Germany facing potential crisis from soaring fuel prices
German businesses have warned that a “veritable economic crisis” is possible due to rising fuel prices.
Small and medium-sized companies within Germany are facing meltdown with the rising cost of diesel and petrol. Diesel has reached a record high at the pumps, while premium gasoline is also approaching an all-time high, hitting motorists nationwide.
The SME Association has now called for petroleum taxes to be slashed and the commuter allowance to be increased. The SMEs issued a warning to trade unions that the record-high costs could end up having drastic consequences for the Eurozone’s largest economy. The business group claims that by the end of 2021, the coronavirus pandemic could be replaced by another crisis.
Hans-Jürgen Völz, chief economist of the Federal Association of Medium-Sized Enterprises (BVMW) issued the stark warning via German media.
Völz said the coronavirus crisis “threatens to be seamlessly replaced by a veritable economic crisis, while other European countries are recovering economically around us”.
He explained the damaging impacts that the rise in fuel prices is having on regions in Germany including the impact on employment.
“The explosion in fuel prices is putting a massive strain on the economy, endangering jobs, growth and prosperity,” he added.
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