Energy shocks don’t just raise our energy bills – they can be turning points in how our economy runs. The UK responded to the energy crises of the 1970s by reshaping its energy system and doubling down on extracting its own fossil fuels from the North Sea. Investment poured in and the UK became a net energy exporter. When energy security is on the line, serious countries act at scale. Today, as the war in Iran continues, scraping the North Sea barrel for the last of its planet-heating fuel is no longer a solution. If the UK is to weather the shocks to come, we need to build a clean energy system for the next generation.
A supply deficit of 10m oil barrels a day and a fifth of global liquefied natural gas (LNG) trade is already having significant effects around the world. The UK is painfully exposed to international gas prices. The public expect inflation to soar, the market is forecasting a rise in interest rates over the next year, and costs on some government borrowing have risen to levels not seen since the 2008 financial crisis. This is what a fossil-fuel shock looks like for an import-dependent country, and it will not stop at energy. UK food inflation is already high, reaching 3.3% in February, and we are likely to see much higher food prices in as little as three months.
