Uncertainties in the Gulf cast shadow over Spring Statementpublished at 12:25 GMT
12:25 GMT
Faisal Islam
Economics editor
Image source, 2026 Bloomberg Finance
The natural gas price for UK delivery in April is absolutely spiralling now.
It just hit 170p a therm – levels not seen since late 2022, during the immediate aftermath of Russia’s invasion of Ukraine and a dash for gas across Europe.
It has more than doubled since markets reopened yesterday.
For those waiting for the Spring Statement and the new OBR forecasts, gas prices have been assumed by that organisation at 78p a therm.
Domestic energy users will be protected for now and will get the already announced cut to bills on 1 April – but if this is sustained for several weeks, the new energy price cap in July would be very painful and problematic.
These are now about half way to levels that did require, for example, government intervention through the multi-billion pound energy price guarantee in 2022.
A possible inflationary spike also puts in doubt the idea of a further series of interest rate cuts from central banks such as the Bank of England.
The markets are responding hard to the uncertainties and the new realities emerging from the Gulf. It obviously casts even more of a shadow over Rachel Reeves’s upcoming statement.
The chancellor will make the argument that having the room to respond to shocks just like this is exactly why there has been a focus on cutting the cost of government borrowing and inflation.