Power prices could rise 5-10% over the next 12 months due to the impact of Brexit on Sterling, according to one of Europe’s largest economic consultancies.
Mike Huggins, a director at Frontier Economics, told the Energy Live News conference that the fall in Sterling would translate to price increases in core energy commodities that would inevitably result in significant hikes in power prices.
“All energy commodities are traded in dollars or Euros. We had seen increases of 5-10% increases pre [Sterling] flash crash, now we are seeing 15-20% increases on things like gas, oil and coal,” said Huggins. “That will have a quite major effect” on power prices, said Huggins, though it might take a year or so to fully materialise.
While he predicted a dip in UK energy consumption of 1-2% over the next 12-24 months, it would not fully mitigate an increase in prices, said Huggins.