IFS warns soaring energy costs could tighten UK household budgets

The Institute for Fiscal Studies issued a Green Budget briefing on October 12, warning that the recent surge in global oil and gas prices will likely increase UK energy costs for households. Oil prices have risen from roughly $60 to $100 per barrel, while UK wholesale gas prices have more than doubled from about 70p to 185p per therm. The institute noted that these wholesale hikes eventually translate into higher consumer bills, tightening household budgets already strained by existing cost-of-living pressures.

It also flagged broader economic risks, including faster-than-expected inflation and the prospect of persistently high interest rates, which could burden mortgage borrowers. The report suggests that businesses and public services will feel the impact as well, and it may force Chancellor John Healey to confront tougher fiscal choices.