Wholesale energy prices in the UK are continuing to rise because of the ongoing cold weather as freezing conditions cause households and businesses to turn up the heating. The latest lockdown measures have compounded this as people working from home are using more energy than normal. This will result in higher costs for any businesses that need to renew energy contracts in the short term.
Additional power plant outages and low levels of wind power has resulted in electricity prices soaring to an all-time high and an increased reliance on imported fuel.
Gas has also increased to a three-year record ahead of sub-zero temperatures forecast below seasonal norms for the next month.
This is a completely different picture from a year ago when the pandemic paralysed industrial activity and even spurred talk of gas prices following oil below zero because of an unprecedented surplus. An increase in the roll out of vaccines may also drive economic recovery and stimulate further demand.