UK faces potential drop of living standard in face of energy crisis: report

The living cost in the United Kingdom (UK) will further rise in the face of the severe energy crisis and inflation in the country, according to a report

The report published on Thursday by the Resolution Foundation, a UK independent think-tank with a focus on people’s living standards, said that the average household income will continue to drop and the real household income will return to the level in 2003 if the UK government fails to adopt any measures to cope with.

The report indicates that household income will fall by 5% from 2022 to 2023 and a further drop of 6% from 2023 to 2024. And due to the dilemma, another 3 million people will be sorted as living in poverty in the country.

The report says the UK government must act responsibly and introduce a series of energy policies to help its people get through the difficulties as soon as possible.

In addition, the surging energy price will also hit hard on industrial production. The country’s Office of Gas and Electricity Markets announced in late August that it will adjust the energy price cap for an average household up by 80% to 3 549 pounds (about 4 180 US dollars) per year from October

A latest survey conducted by the Manufacturers’ Organization showed on Saturday that six in ten companies said the rise in energy costs is “now business threatening”.

The survey also said, “Some 13% (of factories) are now reducing production for short periods or avoiding production altogether during peak energy price periods,” while 7% reduced their production for a longer time in the day.

It was also suggested in the survey that the UK government needs to adopt new measures to control the energy price surge.

Similar to the UK, Italy also faces a rising living costs in the country. The Italian news agency ANSA reported on Saturday that some nine million people, accounting for one-sixth of the total population will fall into poverty due to the energy crisis following an increase in living costs.

Southern Italy is said to be the worst hit. According to local media reports, the Italian government on Friday outlined measures to cut back on energy use this winter, at a time of surging prices.

Starting in October, the indoor rooms will be set to lower temperatures, while the central heating for public buildings and residential buildings will also be limited and the restrictions on heating are expected to be further tightened.