High energy prices threaten UK’s status as manufacturing power, business groups say

The Guardian World

by Phillip Inman

February 22, 2026

AI-Generated Deep Dive Summary

High energy prices in the UK are posing a significant threat to its status as a major manufacturing hub, according to a report by the CBI and Energy UK. The study reveals that 40% of businesses have been forced to cut back on investment due to electricity costs remaining far higher than pre-Ukraine levels. This financial strain is affecting various sectors, including chemical production, pubs, and restaurants, as well as food producers who are increasingly concerned about rising energy charges. The report underscores the impact of soaring energy bills on British industries, which are struggling to stay competitive. Many companies are facing difficulties due to a lack of government action to cap prices or upgrade outdated gas and electricity networks. These challenges have created what one industry group described as "a ticking timebomb," with potential long-term consequences for the UK's manufacturing sector. The situation is particularly critical given the UK's position in global supply chains. If businesses continue to scale back investment, it could lead to a decline in production capacity, reduced employment opportunities, and weaker economic growth. This not only affects domestic industries but also has broader implications for international trade and economic stability. The failure to address energy infrastructure issues and implement effective price controls is putting the UK's manufacturing prowess at risk. Without immediate action, the country could lose its competitive edge, leading to a shift in global supply chains and potentially destabilizing key sectors of the economy. This issue is not just an internal problem for the UK but has far-reaching consequences for the world stage. In conclusion, the rising energy costs and inadequate policy responses are threatening the UK's manufacturing future. The situation requires urgent attention from policymakers to avoid long-term economic damage and maintain its standing as a global manufacturing power.

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Originally published on The Guardian World on 2/22/2026