Marvellous from the Resolution Foundation publishing just after the March Iran conflict
It feels like only yesterday that we experienced a once in a lifetime energy price shock. At least the recent price rises in oil and gas remain both A) of unknown duration and B) well below the size of the energy shock caused by Russia’s invasion of Ukraine in 2022.
For our first chart, we’ve considered how the most recent uptick in prices might affect the energy price cap, with suppliers already pulling fixed-tariff deals. If the highs we saw on Tuesday continued (a big if) the cap would increase by roughly £500, undoing and-then-some the £117 fall coming in April thanks to Government policy.
And although the increases in wholesale prices remain much less than those seen after the Russian invasion of Ukraine, the government spent a huge amount to protect consumers from those prices. So while the recent moves don’t bring us back to the price cap level seen in early 2023, they do push it over £2,000. This, combined with the effect of a jump in oil prices since the start of the conflict in the Middle East, would add around 1.6 percentage points to CPI by the summer – just when we thought we’d be back to target!
and what are those oil prices at least? 10 years of Brent crude from Trading Econ, the most recent observation being Friday 6th March 2026.
