If the Euro collapses, we’re predicting that the impact on global energy markets is likely to be similar to when wholesale prices crashed by 66% in 2008-9 following the collapse of Lehman Brothers. This led to two years of tentative price drops in household gas and electricity bills, with a fall of 6.9% in 2009.
Applied to today’s record average annual gas and electricity bill of £1,345, a 6.9% price drop would equate to a reduction of £93 next year. This doesn’t make up for the jump of around £170 we’ve seen from the price rises this autumn, but at least it bucks the upward trend.
Although a new European recession would be devastating in many ways, there is the thin silver lining that UK gas and electricity prices could finally start coming down, easing pressure on household bills at a time when it would be most needed.