Centre for Energy Policy at the University of Strathclyde’s Post

Last week, the UK Labour government's first budget showcased a strong commitment to a greener future. However, given recent projections indicating a potential 3-degree rise in global temperatures, the budget falls short of what is needed. While the Chancellor announced promising investments in energy, industry, transport, and hydrogen – a more ambitious approach is crucial for the UK to fully capitalise on the opportunities presented by a sustainability-driven growth economy, writes Amy Marshall, Managing Director, Xynteo. Read more > https://lnkd.in/e6f73nx3 #UKBudget #NetZero #Decarbonisation #GoodGrowth

1.    Before the budget announcement, there was a glimmer of hope. However, the subsequent budget and rising electricity bills have disrupted this optimism. 2.    Despite these challenges, the government should remain composed, realign its strategies, and continuously engage with the public to build trust. 3.    The current direction appears misaligned. Addressing the electricity issue, which is a solvable problem, could potentially alleviate sixty percent of the prevailing difficulties. 4.    Ensuring the public's peace of mind is crucial, regardless of external or internal factors. 5.    An industry that once significantly contributed to the economy has been severely constrained. While it is essential to develop other industries, this should be done before heavily taxing the ones currently performing effectively. The halt of the performing industry has led to an economic standstill, as no other sector is functioning effectively. This situation does not require complex solutions but rather a combination of empathy and practical wisdom.

What does the recent UK election mean for energy prices? Tax hikes seem inevitable, given the UK's widening spending gap. But here's the kicker: the UK already shoulders a massive energy debt. So, what does this mean for commercial energy? Expect volatility. As the government grapples with fiscal challenges, commercial energy prices could see significant fluctuations. Businesses need to brace for potential price increases, impacting everything from manufacturing to service delivery. Let's shed some brain calories🧠

Energy price surges and Inflation: Fiscal policy to the rescue? Many policy-makers thought about this question in 2022! Interesting results by Christian Glocker and Philipp Wegmüller in the Journal of International Money and Finance. "Motivated by the fiscal policy measures taken by euro zone governments during the 2021/2022 energy crisis, we examine their ability to counter inflationary surges resulting from energy price hikes in energy-importing economies. We use a calibrated small-open economy model in which monetary policy fixes the exchange rate. Subsidies on the sale of energy and on firms' energy expenditures are among the most effective instruments." https://lnkd.in/eT963Enk

The geopolitical tension in the Middle East causing oil price to go up .. whether the current trend of oil price rise and overall Energy cost reverse back sticky inflation .. and derail planned rate-cut actions of Central Bank and shift monetary policy actions.

📣 New from myself and colleagues at E3G ahead of the #AutumnBudget! The transition to a clean economy is a once in a lifetime opportunity to build the economic growth engine of the future. With a new government in place, laser-focused on revitalising the UK economy, the time is now for a comprehensive economic strategy centred on green prosperity. The Autumn Budget, and next year’s multi-year spending review, are opportunities to spell out this vision for renewal. We set out how the new government should use these upcoming fiscal events to: 💰 Green the financial system ⚡ Accelerate power decarbonisation 🏡 Clean home heating 🏭 Kickstart clean industry ☁ Phase out oil & gas https://lnkd.in/eABKGYZg …

Recommended reading for understanding the UK economy: 👇🏻 https://ukfoundations.co/ Linked above is a new essay, Foundations: Why Britain Has Stagnated, by Ben Southwood, Samuel Hughes, and Sam Bowman. There's some fascinating points made, here are four: 💷 The UK has experienced economic stagnation, with real wage growth flat for 16 years and productivity hindered by high costs and regulatory barriers. 🚉 The UK faces severe infrastructure issues, including high costs for projects like HS2 and a lack of new developments in housing, transport, and energy. ⚡ The UK lags behind other countries in electricity generation, with per capita output significantly lower than in France and the US. The cost of building new energy infrastructure, such as nuclear power plants, is also much higher in the UK. 🏗️ The Foundations report argues for a systematic programme of reform to address these issues, focusing on reducing regulatory barriers, encouraging investment in housing, transport, and energy, and improving the efficiency of infrastructure projects. Please also checkout the video which was the inspiration for this post: https://lnkd.in/ewK4CE3R

With energy bills set to rise 70% next year, small businesses are in for a tough time. For many pubs, restaurants, and independent retailers, electricity costs could hit £13,264 a year from April 2024. Unlike households, businesses don’t have a price cap to protect them from these soaring costs. The government’s past support ended in April 2023, and with the current financial climate, new subsidies seem unlikely. This leaves businesses facing huge energy bills with no safety net. Yet, there’s a glimmer of hope. As the UK focuses on boosting domestic energy production, we could eventually see more stable and affordable energy prices. While this is undoubtedly a challenging time, it might also push businesses to innovate and embrace new technologies that are more energy-efficient. If the government steps in with targeted support, it could make a huge difference, helping these businesses not only survive but come out even stronger, contributing to a more resilient and thriving economy in the future. #Economy #Businesses #Finance #Bills #Innovation #Technology

🚧 Why Has Britain Stagnated? 🚧 The UK faces deep-rooted challenges in housing, energy, and infrastructure, which have significantly stifled economic growth. 📉 🏠 Housing: UK housebuilding is 40% lower than in the 1970s, with planning laws blocking progress. ⚡ Energy: High electricity prices—nearly 50% above the EU average—undermine competitiveness. 🚄 Infrastructure: Major projects are often 50% more expensive than in Europe due to inefficiencies. The solution? Reform planning laws, streamline regulations, and boost green energy and infrastructure investment. 🌱 See: https://ukfoundations.co/ #Economy #Growth #UKPolicy

With a new budget comes a new beginning. 💡🇬🇧 This week, the UK Chancellor Rachel Reeves made history presenting first ever budget under a female Chancellor. The budget brings good news for international investors. Its focus: GDP growth 📈, long-term stability and openness 🌎. The UK #Budget secures a future that is: ♻️ Green: funding for Great British energy, accelerating grid connections, investment to grow renewables including hydrogen and carbon capture, usage, and storage (CCUS). These green solutions sit at the centre of the DK-UK Energy Memorandum of Understanding toward a #greentransition. 🌐 Open: develop a Trade Strategy in 2025 that enhances economic security, complementing the UK’s Industrial Strategy and Net Zero ambitions. This includes strengthened cooperation with the European Union on #economy, #energy, #security, and #resilience. ⚖️ Stable: putting public finances on a sustainable path with strengthened fiscal rules, sound borrowing and independent institutions. Creating certainty for households, businesses, and global markets. The UK’s GDP growth projection has increased from 1.5% to 2% in 2025. #Britain is back and open for business. We are ready to drive sustainable growth across the country.  If you’re an international investor wanting to find out more, please contact us British Embassy or visit 👉 https://lnkd.in/eHEW6Yq.