UK Electricity Prices: Impact of World Market and What it Means for Businesses

There is no denying just how critical electricity rates can be to businesses of all sizes in the UK – and around the world. The prices are steadily increasing for many, which is a cause for concern no matter how you look at it. The impact of the world market and its ramifications is not necessarily something that business owners are looking into for insight regarding electricity rates.

It is a shame, as the world market has had a significant impact on the UK energy landscape – which includes factors both political and economical. Here are just a few factors that have contributed to the change, as well as what you can expect regarding the impact it has on utility rates.

Oil prices are decreasing around the world – why are utility rates remaining the same?

All things considered, oil prices are steadily decreasing all around the world. It is confusing, therefore, why the UK’s utility prices have not followed suit. While it might be strange that there is no significant change, there are legitimate reasons that the prices are not reflecting current trends. To better understand the situation, it is vital that you look into the business practices of certain suppliers in the country.

Making up for demand:

For example, it is a common tactic to purchase oil or other utilities in advance in anticipation of the demand. However, that means that the oil will be sold at its purchase price, and will not change based on whether or not the price of oil decreases after the fact. While it means that there will be no linear decrease, it does bode well for the future if prices are able to remain low.

The possibility of rates climbing due to Brexit:

It is common knowledge that the UK’s exclusion will undoubtedly result in significant changes in more than just electricity prices. It is no stretch to say that energy and gas shortages can and will occur if the transition is not managed the right way. To put things into perspective, the UK has depended on many other countries with regards to energy supply, including the Netherlands and Norway as well as many other European nations.

That said, while it is looking like things could go wrong at any moment, there are many measures being taken to ensure that the UK has a steady stream of energy. However, it is always best to err on the side of caution, which is why it is recommended that you switch to a more reliable utility provider via a quality utility bidder while things are still relatively stable.

Hopefully, the facts above are able to help shed some light on the current state of UK energy, and why changes in the world market do not immediately reflect in current UK energy and utility rates. With the Brexit transition looking a little rocky, it would be prudent to err on the side of caution when it comes to the overall state of energy and gas prices.

Anabel Cooper

Anabel is a graduate of King’s College London and upon graduating, she set out on a journey to inspire and empower women through her words. Besides working as a digital marketing expert, Anabel is a freelance copywriter.

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