Energy crisis escalates as new PM to be announced

The FTSE 100 started the week lower as Russia’s decision to turn off Europe’s gas hangs over the continent like a grim shadow ahead of winter.

Predictably, wholesale gas prices are soaring, raising the prospect of even higher energy bills for businesses and consumers and sending the pound and the euro to new multi-year lows against the dollar.

The US is in the enviable position of having relatively high levels of energy independence which insulate it from Putin’s proxy battle in the energy market as he looks to punish Europe for its support for Ukraine in the current conflict.

This step was not entirely unexpected and everyone will be looking for answers to the current crisis, however it seems unlikely investments in new sources of energy will bear much fruit in the short term.”

AJ Bell investment director Russ Mould said: “This is the treacherous landscape into which a new UK Prime Minister will step later today as the result of the Conservative leadership election is announced.

“Liz Truss is widely expected to prevail, although given the challenges the country faces it feels like something of a poisoned chalice.

“Top of the agenda will have to be some kind of answer to the current energy crisis, with the protracted process of appointing a new leader leaving companies and consumers hanging for weeks after the alarming outlook for energy costs became clear.”