Protecting consumers and the UK economy from an energy price shock

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With the volatility of oil and gas prices in recent weeks, the government is under pressure to manage the impact across the economy. The shock, depending on how long it lasts, will have far wider consequences than the 2022 energy crisis, and the economy is in a much weaker position to deal with it.

The government must take a three-pronged approach to avoid a triple crisis of soaring inflation, reduced demand and possible recession. In this briefing we set out how the government can do this through targeted and universal measures to manage inflation and protect UK billpayers; close working with the Bank of England to avoid long-term scarring on the UK economy; and structural changes to help protect us from future shocks.

There is a political and an economic imperative that the government takes all action possible. The affordability crisis is the number one issue for voters. The government will not be forgiven if bills and inflation soar, or if the economy falls into recession. But it’s equally vital that lessons are learnt from the aftermath of the 2022 energy crisis. The government cannot afford to simply paper over the cracks and must now ensure future resilience and security.

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