Warning lights for Yorkshire's economy flashing red as Liz Truss heads for Downing Street - Chris Burn

The truth is that the warning lights for Yorkshire’s economy are already flashing red.

To give just one small but important example, after more than 20 years in business Ainsty Farm Shop on the outskirts of York has announced it will be closing its doors next month as a direct result of its rising energy bills. Alarmingly, this decision was taken the day before details of the new energy price cap rate was announced. They will not be the last to come to such a decision in the next few months.

In today’s newspaper, David Skaith, owner of men’s clothing shop Winston’s of York, explains that rising utility bills are part of a increasingly-problematic bigger picture of inflation facing small businesses like his.

With import costs also rising, it now costs him 40% more to run his business than it did just six months ago.

As consumer spending power takes a drastic hit, Mr Skaith warns bluntly: “To say we have a disaster coming for businesses across the country is not an exaggeration and our high streets could face the brunt of it.”

That assessment is one shared by the CBI. Research from the organisation has found 69% of businesses expect their energy bills to increase in the next three months, with almost a third anticipating rises of more than 30% - something the CBI warns represents an “existential threat”.

Respected North Yorkshire MP Julian Smith tweeted last week: “I have had conversations with small businesses across Skipton and Ripon this week regarding huge rises in their energy costs. It’s clear urgent intervention is also required for SMEs as well as for households.”

While there is understandable focus on what help the new Prime Minister and her Chancellor can provide to households and businesses this winter, the grim truth is that the bleak economic picture looks set to stretch throughout 2023 and potentially beyond. Analysts’ estimates suggest energy price rises could get close to double their current position by April and remain well above £5,000 throughout the course of next year - requiring an extraordinary realignment in household and business spending.

As current Chancellor Nadhim Zahawi has suggested, even those earning decent salaries that would have previously supported a comfortable lifestyle are likely to need some form of help. “If you are a senior nurse or a senior teacher on £45,000 a year, you’re having your energy bills go up by 80% and will probably rise even higher in the new year – it’s really hard,” he said.

For many households with less income, as it stands they will simply be unable to pay their bills - a situation also facing huge numbers of businesses.

This all comes in the context of the Bank of England being seemingly set on persistent increases in interest rates in an attempt to dampen down the double-digit inflation the country is currently experiencing.

It means that for the foreseeable future, the era of ultra-low rates and cheap credit designed to keep the UK economy afloat following the global financial crisis is drawing to an end. There is a reasonable argument that this type of market correction has been required for a while and that house prices in particular have been artificially inflated in an unhealthy way for too long.

But while there may reasonable macro-economic arguments for pursuing this course of action, the simply reality is that in the short-term many millions of households will have even less money in their pocket than they do already.

As policy expert Sam Freedman sagely put it recently: “I feel a little bit like at the start of Covid when everyone was like ‘This is going to be a tough few weeks’ and I was looking at that first Imperial report thinking ‘but this is going to last at least 18 months...’”

Businesses and households unfortunately have to prepare to strap in for the long haul.