quote
menu

What ‘Black Monday’ means for UK SME business gas


Worries over China saw the world economy tumble on 24 August, leading some to dub it ‘Black Monday’. How will this affect UK SMEs’ business gas prices?

While the world economy has been steadily growing stronger, weakness persists in the wake of the global financial crisis and ensuing downturn. The recent fall in stocks and commodity prices has sparked concerns of another disruption.

China is the source of the fall: concerns about slowing growth and the unsustainability of debt-fuelled spending in the world’s second largest economy have been building for some time. China’s impressive economic achievements have mostly been come from its prowess in manufacturing. But as factory worker wages have risen and younger Chinese expectations have increased, regional competition has begun to undermine the Chinese manufacturing miracle.

In response, China has tried to shift to a consumption model. While this has been successful to a degree, investment has still been a main pillar of the economy: massive sums have been committed to infrastructure. Recent stock market valuations of Chinese companies have caused concern of a bubble (along with, to a lesser extent, property prices).

The falls of ‘Black Monday’ appear to be a long-overdue correction in value.

What does this mean for UK SMEs?

While China has hastened to cut interest rates to take the pressure off, other markets in the developed world seem to be more resilient. While drawing conclusions at such an early stage is dangerous, the stock markets in Western countries have made up much of the ground lost.

The UK’s austerity programme and stress testing of banks has left it better placed to weather such shocks. As the pound’s value is likely to increase, UK goods would become more expensive to consumers elsewhere, potentially dragging down exports. Cheap business gas could be the main benefit for UK small to medium sized companies.

Implications for business gas rates

Commodities have dropped in price across the board. Seemingly of most importance to SMEs is the price of benchmark West Texas Intermediate crude oil, which recently dipped below $39 a barrel, down from $140 in 2008, a reduction of 72%.

While business gas prices have yet to see a decrease on the same scale, the recent flat growth in the rate business gas suppliers pay may be expected to lead to a fall. However, as coal and nuclear is shunned and gas pipeline developments stall, the current uncertainty could be the perfect opportunity to lock in cheap business gas prices.

To find out more about what business gas suppliers are offering, give us a call on 0330 0100 251 (or request a call back using our form).

More information on business gas is available on our dedicated page.

Related Articles

Moving Premises and Business Energy

We know that moving into new businesses premises can be stressful and important tasks, such as organising your...

Read More

Deemed Contract Rates

What are Deemed Contracts? A Deemed Contract is an informal agreement which may be entered into should your bu...

Read More

Out-of-Contract Rates

Out-of-Contract rates Out-of-Contract rates are applied by business energy suppliers when customers have come ...

Read More
Excellent, 9.7 / 10

A lovely lady called Bhavni phoned me …

"A lovely lady called Bhavni phoned me very quickly after I went online. She couldn't have been more helpful, explaining all the different rates for me. She managed to save me a huge amount per year - gave me her direct phone number if I needed to phone again - like gold-dust! even gave me a termination letter to send to my supplier. Couldn't have been easier and will definitely use again - and hope I get to speak to Bhavni again. Thanks again"

This review was posted by Julie Dickie on the 17th of January 2018

Excellent service and hassle free

"Excellent service and hassle free, Jessica Purnell handled everything for me and got us a great deal, even giving advice on how to cancel the previous contract. Thank You"

This review was posted by Neville Blenkinsopp on the 17th of January 2018

Brilliant service

"Brilliant service - very quick to the point and explained everything very well! Would recommend to anyone who is looking to change their electricity supplier."

This review was posted by Jess on the 17th of January 2018

Excellent service straight to the point …

"Excellent service straight to the point and the process was painless!"

This review was posted by Nick K on the 16th of January 2018

I wanted to switch energy supplier as …

"I wanted to switch energy supplier as had been with current one for a number of years but prices had increased quite a lot. I dealt with an extremely helpful person called Bhavni Manek, she made this a very quick and easy experience and would use the company again if they are all as great as she was"

This review was posted by amanda green on the 15th of January 2018