Best Of

As I predicted, mandatory WFH here we come.

If we're really lucky we might even get a de facto lockdown

Huge energy price rises pile pressure on British companies

Warning of businesses going under as cost of gas set to rise by as much as 80 per cent, while electricity bills to increase by up to 30 per cent

Businesses across the UK are facing “eye-watering” rises in their energy bills because of the conflict in the Middle East, analysis for The Times suggests.

Unlike households, companies are not insulated from volatility in gas and electricity prices, which have almost doubled since the Iran war began.

The problem is particularly acute for the thousands of companies that fix their annual price tariff at the start of the financial year in April and will face an immediate sharp rise in their bills.

Analysis by the energy consultancy Cornwall Insight found that as a result of the conflict, business users’ electricity bills would rise by up to 30 per cent, while the cost of gas could go up by as much as 80 per cent. This would mean that a business such as a larger retail and leisure site, on an average 12-month electricity contract, would have an annual bill of £578,000 — £95,000 more than early last month.

For gas, bills have risen by £376,000, reaching just over £1.02 million a year, an increase of nearly 60 per cent, based on the latest wholesale prices.

On Tuesday Wael Sawan, the chief executive of Shell, warned that Europe risked fuel shortages as soon as next month. At an industry conference in Houston, Texas, he said the global oil and gas supply squeeze had already forced parts of Asia to cut energy consumption and that the “ripple effect” threatened to spread west within days.

https://www.thetimes.com/uk/politics/article/huge-energy-price-rises-pile-pressure-on-british-companies-6w9m0j0xk

Forget the price and the bills that take up most of that story and focus on the end: shortages. If there is no petrol, the price doesn't matter.

The really bad news, as we saw after SMO inflation, is an upsurge in calls by misguided but influential pundits for tightening the money supply and higher interest rates to curb inflation. Idiots!

One of the great logical fallacies of our times: that imported commodity inflation is somehow the fault of over-exuberant businesses and consumers and can best be held in check by choking off money supply.

As you said, exactly the same problem in 2022: people who should know better failing to distinguish between home grown demand driven inflation and external supply shocks.

I completely agree. The correct response to an external shock like this is to cut interest rates not increase them. And to reduce taxes so that any windfall gained by the government is available to maintain demand. And of course to reopen the North Sea but that is a longer term help not immediate.

What we will get instead is a tightening of monetary policy by increases in base rates and the government spending lots of money it doesn’t have to boost consumption amongst its favoured clientele.

Idiots.

As I predicted, mandatory WFH here we come.

If we're really lucky we might even get a de facto lockdown

Huge energy price rises pile pressure on British companies

Warning of businesses going under as cost of gas set to rise by as much as 80 per cent, while electricity bills to increase by up to 30 per cent

Businesses across the UK are facing “eye-watering” rises in their energy bills because of the conflict in the Middle East, analysis for The Times suggests.

Unlike households, companies are not insulated from volatility in gas and electricity prices, which have almost doubled since the Iran war began.

The problem is particularly acute for the thousands of companies that fix their annual price tariff at the start of the financial year in April and will face an immediate sharp rise in their bills.

Analysis by the energy consultancy Cornwall Insight found that as a result of the conflict, business users’ electricity bills would rise by up to 30 per cent, while the cost of gas could go up by as much as 80 per cent. This would mean that a business such as a larger retail and leisure site, on an average 12-month electricity contract, would have an annual bill of £578,000 — £95,000 more than early last month.

For gas, bills have risen by £376,000, reaching just over £1.02 million a year, an increase of nearly 60 per cent, based on the latest wholesale prices.

On Tuesday Wael Sawan, the chief executive of Shell, warned that Europe risked fuel shortages as soon as next month. At an industry conference in Houston, Texas, he said the global oil and gas supply squeeze had already forced parts of Asia to cut energy consumption and that the “ripple effect” threatened to spread west within days.

https://www.thetimes.com/uk/politics/article/huge-energy-price-rises-pile-pressure-on-british-companies-6w9m0j0xk

We seem to have got into the mindset that the government can protect businesses and people from all exogenous risks. That’s just not affordable.

The reality is that if a business can’t operate profitability at a given level of energy prices and that level is sustained then the business should shut down and the capital be redeployed

The reality is a lot of what we face and will face now with energy is as a result of inept govt policy.

I agree that govt bailing us all out is not the solution

But govt needs also to put in place policies that are pro business and help business, not fuck them over or leave business vulnerable to the whims of the Middle East.

And it’s not just renewables. We need oil and gas whether we like it or not.

With that I’m off to take an old friend, my bike, off for its final journey.

Um - North Sea oil wouldn't even at its peak provided enough energy for us.

So exactly what has the Government done wrong because we are shifting to renewables far faster than anyone thought we would.

We're passing up maybe a couple of billion a year in tax revenue, and taking a small slice out of our balance of payments deficit.

Continuing N Sea oil exploration, and the roll out of renewables, are two almost completely separate issues now. There's virtually no linkage.
So the arguments for and against exploration - which will make almost no difference to our future usage of oil or gas - are purely economic. And quite strongly in favour of granting drilling licenses.

Arguing the opposite is essentially environmental cosplay.

As I predicted, mandatory WFH here we come.

If we're really lucky we might even get a de facto lockdown

Huge energy price rises pile pressure on British companies

Warning of businesses going under as cost of gas set to rise by as much as 80 per cent, while electricity bills to increase by up to 30 per cent

Businesses across the UK are facing “eye-watering” rises in their energy bills because of the conflict in the Middle East, analysis for The Times suggests.

Unlike households, companies are not insulated from volatility in gas and electricity prices, which have almost doubled since the Iran war began.

The problem is particularly acute for the thousands of companies that fix their annual price tariff at the start of the financial year in April and will face an immediate sharp rise in their bills.

Analysis by the energy consultancy Cornwall Insight found that as a result of the conflict, business users’ electricity bills would rise by up to 30 per cent, while the cost of gas could go up by as much as 80 per cent. This would mean that a business such as a larger retail and leisure site, on an average 12-month electricity contract, would have an annual bill of £578,000 — £95,000 more than early last month.

For gas, bills have risen by £376,000, reaching just over £1.02 million a year, an increase of nearly 60 per cent, based on the latest wholesale prices.

On Tuesday Wael Sawan, the chief executive of Shell, warned that Europe risked fuel shortages as soon as next month. At an industry conference in Houston, Texas, he said the global oil and gas supply squeeze had already forced parts of Asia to cut energy consumption and that the “ripple effect” threatened to spread west within days.

https://www.thetimes.com/uk/politics/article/huge-energy-price-rises-pile-pressure-on-british-companies-6w9m0j0xk

Depressing. I’d much rather businesses were given some kind of some support - low interest government loans or similar - than handouts to people who can shoulder this. Loans that could bd used to install solar, heat pumps, batteries.

I include myself in this. We save for emergencies so can weather this out. We do huge mileage each year, but a lot of that is social, weekend driving that we can cut back on. We don’t need any help from the government.

OTOH , we don’t use much gas because we live in an energy-efficient flat, appropriate for two young-ish adults. I’m not sure why people like me should bail out those in big, detached houses. They’ve made their choice.

We live in a big detached house and are unlikely to be affected beyond what we can afford

However, if those energy prices hit next week no amount of future investment in energy savings will prevent both huge price rises and many lost jobs

This is a very serious crisis that has nightmare implications for all governments

Everyone will be affected if there is no fuel. No transport, no deliveries, nothing in shops, and so on.

But the flip side is the Trump family have made a ton of money on Polymarket.

Is Polymarket essentially similar to the Betfair Exchange?

Kalshi and Polymarket might loosely be thought of as Betfair on steroids with minimal regulation. Some markets are seemingly designed for manipulation and insider trading, such as the number of tweets Elon Musk makes in a day.

As I predicted, mandatory WFH here we come.

If we're really lucky we might even get a de facto lockdown

Huge energy price rises pile pressure on British companies

Warning of businesses going under as cost of gas set to rise by as much as 80 per cent, while electricity bills to increase by up to 30 per cent

Businesses across the UK are facing “eye-watering” rises in their energy bills because of the conflict in the Middle East, analysis for The Times suggests.

Unlike households, companies are not insulated from volatility in gas and electricity prices, which have almost doubled since the Iran war began.

The problem is particularly acute for the thousands of companies that fix their annual price tariff at the start of the financial year in April and will face an immediate sharp rise in their bills.

Analysis by the energy consultancy Cornwall Insight found that as a result of the conflict, business users’ electricity bills would rise by up to 30 per cent, while the cost of gas could go up by as much as 80 per cent. This would mean that a business such as a larger retail and leisure site, on an average 12-month electricity contract, would have an annual bill of £578,000 — £95,000 more than early last month.

For gas, bills have risen by £376,000, reaching just over £1.02 million a year, an increase of nearly 60 per cent, based on the latest wholesale prices.

On Tuesday Wael Sawan, the chief executive of Shell, warned that Europe risked fuel shortages as soon as next month. At an industry conference in Houston, Texas, he said the global oil and gas supply squeeze had already forced parts of Asia to cut energy consumption and that the “ripple effect” threatened to spread west within days.

https://www.thetimes.com/uk/politics/article/huge-energy-price-rises-pile-pressure-on-british-companies-6w9m0j0xk

We seem to have got into the mindset that the government can protect businesses and people from all exogenous risks. That’s just not affordable.

The reality is that if a business can’t operate profitability at a given level of energy prices and that level is sustained then the business should shut down and the capital be redeployed

The reality is a lot of what we face and will face now with energy is as a result of inept govt policy.

I agree that govt bailing us all out is not the solution

But govt needs also to put in place policies that are pro business and help business, not fuck them over or leave business vulnerable to the whims of the Middle East.

And it’s not just renewables. We need oil and gas whether we like it or not.

With that I’m off to take an old friend, my bike, off for its final journey.

I broadly agree with that. The problem with bailing out fossil fuel users is it perverts the incentive to get off them, leaving us vulnerable in the future (as we’re now experiencing post-Ukraine).

If we’re going to help businesses, a universal cut in business rates, employer NICs would be the best option.