The Energy Price Shock—Impact, Policy Responses, and Reform Options: United Kingdom

July 13, 2023

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Format: Chicago

Anil Ari, and Carlos Mulas-Granados. The Energy Price Shock—Impact, Policy Responses, and Reform Options: United Kingdom, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Summary

The 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. In this context, 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; and section III provides staff’s assessment of these measures and sets out some options to optimize the policy response to a possible resurgence in energy prices. These include structural measures to ensure energy security and raise resilience to spikes in energy prices, and options to refine, especially the targeting of, support measures that could be introduced in response.

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

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2023/048
Stock No:

SIPEA2023048
ISBN:

9798400246135
ISSN:

2958-7875

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