The UK is at risk of losing its status as a major manufacturing centre after a sharp rise in energy prices that has forced about 40% of businesses to cut back investment, according to a report by the CBI and Energy UK.<\/p>\n
In a stinging message to ministers, the report said British businesses \u2013 from chemical producers to pubs and restaurants \u2013 were being undermined by a failure to cap prices and upgrade the UK\u2019s ageing gas and electricity networks.<\/p>\n
A far-reaching review of outmoded regulations that govern the sale and supply of energy is also needed to spur investment and boost economic growth, the report said.<\/p>\n
Energy UK, which represents more than 100 electricity generators and retailers, said business electricity costs remained 70% higher than before Russia\u2019s invasion of Ukraine, while gas prices were 60% higher.<\/p>\n
A survey underpinning the report found that almost 90% of firms have seen energy bills rise over the last five years and four in 10 had reduced investment as a result.<\/p>\n
Without a reduction in energy bills, \u201cthe risk of job losses, production cuts, plant closures and offshoring will increase,\u201d the report said.<\/p>\n
The CBI and Energy UK said ministers needed to join forces with industry to conduct a comprehensive review of the UK\u2019s energy needs and how they can be met during the transition to net zero.<\/p>\n
A taskforce made up of researchers from both organisations and industry groups will consider how reforms could reduce prices and improve the efficiency of the gas and electricity networks.<\/p>\n
The aim is to persuade ministers that initiatives to improve the UK\u2019s energy system have not gone far enough, leaving the UK in danger of widespread deindustrialisation.<\/p>\n
The UK has some of the most expensive industrial energy prices in the developed world. They are almost two-thirds above the median of International Energy Agency (IEA) countries and the highest among G7 members.<\/p>\n
As an indication of the impact, figures covering 2025 show the UK\u2019s trade in goods slumped to its worst performance on record. Britain reported a \u00a3248.3bn deficit for goods \u2013 \u00a330.5bn more than the previous year.<\/p>\n
The Office for National Statistics said the widening gap was only partly filled by a \u00a3192bn surplus in services, up \u00a316.4bn from the previous year.<\/p>\n