{
  "title": "United Kingdom: Selected Issues",
  "publication": "IMF Staff Country Reports, July 11, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/07/10/united-kingdom-selected-issues-535881",
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  "summary": "This Selected Issues paper analyzes the impact of the energy price shock on UK households and firms and describes the energy support measures introduced by the UK government.",
  "sections": [
    {
      "heading": "Energy price shock — impact and assessment",
      "content": "- Analyzes the impact of the energy price shock on UK households and firms.\n- Describes the energy support measures introduced by the UK government and provides IMF staff’s assessment of these measures.\n- Retail energy prices in the UK have seen greater pass-through from wholesale prices than in regional peers."
    },
    {
      "heading": "Policy options and structural recommendations",
      "content": "- Proposes structural measures to ensure energy security and raise resilience to spikes in energy prices.\n- Recommends refining support measures, especially improving the targeting of support that could be introduced in response to a possible resurgence in energy prices.\n- Advises that broader business support should be targeted at viable but financially vulnerable firms and should focus on:\n  - limiting scarring, and\n  - facilitating the adjustment to higher energy prices."
    },
    {
      "heading": "Liquidity and moral hazard considerations",
      "content": "- Notes that liquidity support may be appropriate to enable energy providers to meet their margin calls while continuing energy purchases on wholesale markets.\n- Stresses that support should be structured to prevent moral hazard by management and investors."
    },
    {
      "heading": "Key takeaways",
      "content": "- Focus on targeted, time-bound support for households and firms to shield vulnerable groups and viable businesses from temporary shocks.\n- Strengthen energy security and resilience to reduce future exposure to wholesale price spikes.\n- Consider liquidity mechanisms for energy providers alongside safeguards to avoid creating perverse incentives.\n\nUnited Kingdom: Selected Issues — IMF Staff Country Reports (July 11, 2023).\n\n---\n\n Content in this bundle\n\n- United Kingdom: Selected Issues; IMF Country Report No. 23/253; June 20, 2023\n  - United Kingdom: Selected Issues; IMF Country Report No. 23/253; June 20, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - United Kingdom: Selected Issues; IMF Country Report No. 23/253; June 20, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 11, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400248658.002",
    "Analyzes the impact of the energy price shock on UK households and firms.",
    "Describes the energy support measures introduced by the UK government and provides IMF staff’s assessment of these measures.",
    "Retail energy prices in the UK have seen greater pass-through from wholesale prices than in regional peers.",
    "Proposes structural measures to ensure energy security and raise resilience to spikes in energy prices.",
    "Recommends refining support measures, especially improving the targeting of support that could be introduced in response to a possible resurgence in energy prices.",
    "Advises that broader business support should be targeted at viable but financially vulnerable firms and should focus on:",
    "Notes that liquidity support may be appropriate to enable energy providers to meet their margin calls while continuing energy purchases on wholesale markets.",
    "Stresses that support should be structured to prevent moral hazard by management and investors.",
    "Focus on targeted, time-bound support for households and firms to shield vulnerable groups and viable businesses from temporary shocks.",
    "Strengthen energy security and resilience to reduce future exposure to wholesale price spikes.",
    "Consider liquidity mechanisms for energy providers alongside safeguards to avoid creating perverse incentives.",
    "**United Kingdom: Selected Issues; IMF Country Report No. 23/253; June 20, 2023**"
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