The Energy Price Shock—Impact, Policy Responses, and Reform Options: United Kingdom
Selected Issues Papers, July 13, 2023
Source details
- Canonical URL
- The Energy Price Shock—Impact, Policy Responses, and Reform Options: United Kingdom
Other formats
Bibliographic details
- Authors: Anil Ari, Carlos Mulas-Granados
- Published: July 13, 2023
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400246135.018
Context and overview
- Surge in energy prices due to Russia’s war in Ukraine inflicted a sharp terms of trade shock on the UK economy.
- While energy prices have since declined, the future energy price path remains uncertain, "with futures-implied prices substantially above their levels prior to October 2021, when Russian natural gas imports to Europe began to be curtailed."
- Structure of the paper:
- Section I analyzes the impact of the energy price shock on UK households and firms.
- Section II describes the energy support measures introduced by the UK government.
- Section III provides staff’s assessment of these measures and sets out options to optimize the policy response to a possible resurgence in energy prices.
Key findings on impact (Section I)
- The surge constituted a sharp terms of trade shock for the UK economy.
- Households and firms experienced material effects from the energy price shock (details analyzed in Section I of the paper).
Government responses described (Section II)
- The paper documents the energy support measures introduced by the UK government in response to the shock (described in Section II).
Staff assessment and reform options (Section III)
- Staff assesses the government’s energy support measures and presents options to optimize policy responses in the event of renewed energy price increases.
- Options highlighted include:
- Structural measures to ensure energy security and raise resilience to spikes in energy prices.
- Options to refine, especially the targeting of, support measures that could be introduced in response.
Subject areas and keywords
- Subject: Commodities, Consumption, Economic sectors, Electricity, Energy prices, Fuel prices, International organization, Monetary policy, National accounts, Natural gas sector, Prices
- Keywords: Consumption, electricity, energy crisis, energy policy, energy price shock, Energy prices, Europe, Fuel prices, green transistion, natural gas, Natural gas sector, nited Kingdom, pre-existing price regulation, price controls, price signal, reform option, Russia’s invasion of Ukraine, shock on UK
Content in this bundle
- Sipea2023048