Julian Jessop: 'Bigger prize' trade deals lie OUTSIDE of EU
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Julian Jessop, a self-described “Brexit optimist”, tweeted that “energy prices are surging across Europe” as “front-month Dutch and UK gas futures both jumped about 25 percent today and are at similar levels too”. He also posted a chart showing that the energy price components of the Consumer Price Indices (CPIs) of Italy, France and Germany had all risen in September when compared to August.
Mr Jessop noted: “September data not yet available for the UK, Canada or US, and UK CPI in particular will jump in October, but not true that ‘Brexit Britain’ has been hit much harder by rising prices than others”.
According to the latest figures released by Bloomberg, German gas prices have soared from €50 per megawatt hour at the start of the year to around €250.
It said that “Europe’s gas stockpiles are at their lowest seasonal level in more than a decade, with domestic production lagging behind demand”.
Global natural gas prices have been rising sharply since April as economies begin to unlock from the coronavirus pandemic.
Germany’s Federal Statistical Office announced late in August that the country’s CPI had risen 3.9 percent year-on-year, while in Belgium it grew to over 2.7 percent.
The UK’s CPI also grew 3.2 percent in August, largely spurred on by the coronavirus pandemic, the Office for National Statistics said.
However, Spain’s rate of inflation soared to 4 percent per year, according to CPI data published by its National Statistics Institute (INE) last Wednesday.
The rise in consumer prices is higher than that recorded last August, and is at a level not seen since September 2008.
In a note, the INE highlighted that the rise in electricity prices – and to a lesser extent, higher prices of package holidays, fuel and lubricants for vehicles – was having the greatest influence on inflation.
The deepening energy crisis has led to scores of people claiming online the crisis was triggered by the UK leaving the Internal Energy Market (IEM).
European figures have also attempted to lay the blame on Brexit, including German SDP leader Olaf Scholz, and the EU’s chief Brexit negotiator and contender for the French presidency Michel Barnier, who said that the energy crisis was “a direct and mechanical consequence of Brexit”.
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But the claim has been disputed by fact-checkers Full Fact, who argued that “there is no evidence that leaving the EU was a major reason behind price increases felt in the UK”.
In France last week, one of President Emmanuel Macron’s own ministers broke ranks to rage against the IEM, describing the function of the energy market as “aberrant”, according to Le Parisien newspaper.
Speaking on parliamentary TV, minister for the economy Bruno Le Maire said “the French are paying the bill in a way that they cannot understand and that is totally inefficient from an economic point of view.”
He continued: “In France, we get our electricity from nuclear power plants and hydraulic power.
“We therefore have carbon-free energy and a very low cost, but the market […] means that electricity prices in France are aligned with gas prices.”
The Government has also repeatedly said that it was the recovery from the coronavirus pandemic that was fuelling the shortage.
In a statement to the House of Commons on Sept. 20, Business Secretary Kwasi Kwarteng stressed that the ongoing energy crisis was a “global situation”.
“While the UK, like other countries in Europe, has been affected by global prices, Britain benefits from having a diverse range of gas supply sources,” he said.
We have more than sufficient capacity to meet demand, and we do not expect supply emergencies to occur this winter.”
Mr Kwarteng added: “Our security of gas supply is robust, but it is the case that the UK is still too reliant on fossil fuels.
“Our exposure to volatile global gas prices underscores the importance of our plan to build a strong, home-grown renewable energy sector to strengthen our energy security into the future.”
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