M&S accuses Labour of driving up energy bills

Core Viewpoint - The UK economy is facing significant challenges due to rising energy costs and inflation, exacerbated by geopolitical tensions, particularly the war in the Middle East, which has led to increased oil and gas prices. Group 1: Energy Costs and Business Impact - British businesses are currently paying 60% more for gas and 70% more for electricity compared to pre-energy crisis levels, despite a substantial drop in wholesale prices during the same period [1] - Government-imposed levies now account for over half of energy costs for companies like M&S, which has raised concerns about sustainability for UK businesses [5][6] - The OECD has indicated that the UK is particularly vulnerable due to its heavy reliance on imported energy, with oil prices rising from $70 to around $100 per barrel and natural gas prices nearly doubling since the onset of the conflict in Iran [4][11] Group 2: Economic Growth and Inflation - The OECD has downgraded the UK's growth forecast to 0.7% for this year, significantly lower than the previous estimate of 1.2%, marking the largest downgrade among G20 nations [7] - Inflation is expected to rise to 4%, double the Bank of England's target, leading to increased living costs for families and businesses [8] - The UK economy's weak growth momentum at the end of the previous year has left it exposed to negative shocks from rising energy prices [9] Group 3: Government Response and Future Outlook - There is mounting pressure on the UK government to provide support for households and businesses facing soaring energy bills, with calls for targeted assistance rather than broad subsidies [16][17] - The Bank of England is expected to raise interest rates multiple times in the coming year to combat inflation, a shift from earlier expectations of rate cuts [12] - The OECD warns that high energy prices may persist long after the current geopolitical conflicts are resolved, potentially impacting food prices as well [11][18]