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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.
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.
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.
More information on business gas is available on our dedicated page.
"Very easy. Bea Luseni very efficient & knowledgeable."This review was posted by Alan Duffy on the 31st of March 2017
Super helpful and easy to work with
"Recommend this company in a heartbeat - Nicole Borneuf was super easy to talk to, was not pushy in the slightest, very helpful and replied with all my questions very professionally and did all she could to help. I had to deal with a few companies to sort my business energy out, all but Nicole were too pushy for my liking and I refused to follow through with them. Thank Nicole - you are a credit to your company, thank you for making the stressful energy change so easy."This review was posted by Mia Drew on the 29th of March 2017
An Extremely Competent Company
"Switch my business has not only helped my SME secure a good energy deal for the second year running but Jessica swiftly found a alternative supplier for me when I was let down on the day of switching by the new contractual provider I had chosen some 4 months previously. Being suddenly out of contract and without provider is everyone's energy nightmare. Greatest thanks."This review was posted by S McMillan on the 29th of March 2017
Helpful, friendly and we saved lots of money!
"Jessica Purnell was helpful and friendly, she made the whole process easy and simple AND we saved lots of money thanks Jess"This review was posted by Melanie Baker on the 23rd of March 2017
Quick & Easy
"Kabibi was very helpful and the whole process was very efficient. The one small reservation I had was that I was phoned up by Kabibi almost immediately having received my online quote - which wasn't enough time for me to finish reading the quotes! Fortunately she was able to assist me in a greater savings on both Gas & Electricity, and so as long as the switchover is seamless I will remain very happy with the service."This review was posted by Amanda Brown on the 21st of March 2017