This week, it was reported that the economic downturn in Q4 had meant the UK is in recession. Hardly the news Sunak needed on the eve of two by-elections. Hunt was quick off the mark talking about the fact that overall the economic indicators are positive looking ahead, which is fair comment, equally the fact salary inflation remains high, has led to suggestions that any hope of interest rates coming down in the first half of the year are fanciful.
Since the war in Ukraine began, the exposure the UK has regarding energy has become ever more clear. The move to renewable energy sources is admirable, equally the challenge has been the seasonality leading to surges and shortfalls, where the steps the Government have taken to resolve this are starting to manifest, with jobs in Energy in Scotland now hitting record levels.
To say the war in Ukraine has caused the dysfunction in the UK’s energy strategy to be exposed is an understatement. Renewable energies, whilst in unit cost terms are coming down, don’t generate sufficient power all year round to be viable. What this had meant is the UK would be generating a surplus over summer, whilst buying power from the continent over the winter. Up until the Ukraine war, that had worked and had meant the long-term storage facilities at rough had been shut down for example, as power had always been available from the continent.
