Millions of families will face winter energy bill misery without Government action - Greg Wright

Sir Dave Ramsden, the Deputy Governor for Markets and Banking at the Bank of England, who is also a member of the Monetary Policy Committee, had some sobering words.

Every syllable uttered by members of the MPC is scrutinised by the global markets for hints about future rate movements, which means they have to choose their words carefully.

When it came to the wider economy, Sir Dave’s message was clear and not a source of comfort.

“We are forecasting that the UK economy is going to go into recession from the end of this year.,’’ he said.

“That’s been driven primarily by these higher energy prices. We’ve seen wholesale gas prices double just since we last published a forecast in May. It’s unprecedented increases.

“Households and businesses are experiencing very high inflation at the moment and are going to go on experiencing high inflation, according to our forecasts.

“But that mustn’t become embedded into their thinking about the economy. It’s really important that doesn’t become the norm.”

Sir Dave said the latest increases in energy prices were “very much driven by, originally, Russia’s invasion of Ukraine and now by the constraint on supplies to Europe which Russia is imposing”. As a result, there’s great uncertainties about what happens next in energy markets.

The soaring temperature and rocketing inflation have brought forward lazy comparisons with the 1970s, although, in truth, the UK economy is far more flexible and environmentally friendly today than it was half a century ago.

But the challenges ahead are alarming. In almost 20 years on The Yorkshire Post’s business desk, I don’t think I’ve ever seen UK consumers facing such a bleak outlook.

Leaked Government documents reportedly warned that a “reasonable worst-case scenario” could see outages for homes and businesses in January if there is a combination of below-average temperatures and a drop in gas imports.

Cornwall Insight said bills are set to soar to around £3,582 in October, from £1,971 previously, before rising even further in the new year. Crisis talks to “knock some heads together” are due to take place between energy sector bosses and the Government after the price cap was forecast to hit more than £4,200 in January.

Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng will ask gas and electricity company executives to submit a breakdown of expected profits and payouts as well as investment plans for the next three years. Greg Jackson, founder of energy company Octopus Energy, told BBC Radio 4’s Today programme, he thinks households are “safe” from possible blackouts this winter. Education Secretary James Cleverly also sought to downplay concerns over energy blackouts this winter.

But consumer champion Martin Lewis, always a voice of compassion and sanity, was right to warn that the predicted increases will mean energy bills are going to be simply unaffordable for millions of people.

He said on Twitter: “People’s livelihoods, mental wellbeing and in some cases very lives depend on this. This is desperate.”

Soaring energy bills, rather than the war on “woke” culture, will be the biggest challenge facing Britain over the next few years. There is no excuse for Government inaction.

Parliament should be recalled to hammer out a strategy for tackling this crisis, which could include ordering Ofgem to maintain the price cap at existing rates, until a solution is found. This is no time for a void at the heart of power.