In the wake of Brexit and the COVID-19 pandemic, the rapid economic recovery of the United Kingdom has reportedly come into question with record high energy prices forcing the closure of two fertilizer facilities in northern England and bringing steel plants to a standstill.
According to reports, this is some of the clearest evidence that the energy crisis that is currently plaguing Europe could severely compromise the UK's economic recovery.
As per reports, CF Industries, a US fertilizer producer, has suspended production at its factories in Teesside, Billingham, and Ince, Cheshire, which employ around 600 workers due to skyrocketing gas rates, which have reached repeated record highs across Europe in recent weeks.
Goldman Sachs, a prominent commodities trader, warned that rising prices will put heavy industries throughout Europe in danger of facing blackouts this winter, especially if cold weather persists into 2022 across Europe and Asia.
The warning arrives as UK Steel, the sector's trade body, announced that steelmakers were already compelled to halt production during peak electricity demand hours owing to market power costs.
The energy price shock has prompted calls for UK authorities to take immediate action to safeguard companies and households, while governments throughout Europe are moving ahead with rescue plans to help energy customers survive the upcoming winter.
Michael Lewis, CEO of E.ON UK, leveraged an interview with the Financial Times to urge the government to assist hard-pressed households by shifting the expense of supporting clean energy subsidies from energy prices to general taxes.
In Spain, the government has planned to take back €3 billion (£2.6 billion) worth of profits from energy producers, and introduce tax breaks for customers to halt the economic contagion caused by skyrocketing energy costs.
The French government is also exploring direct energy subsidies, while Greece has set up a €150 million bailout fund to reduce all consumer costs.
According to market analysts at S&P Global Platts, the UK government has been sluggish to respond to the growing energy crisis, despite Britain bearing the highest energy market costs in Europe.
The CBI, UK's largest business organization, stated that a rise in energy prices was a worry for firms trying to speed their recovery from the COVID-19 pandemic.