‘We’re into 1973 territory now’: How bad could the energy price crisis get?
The energy price surge caused by war in the Middle East has sent shockwaves through Westminster. It has pushed up inflation and the cost of borrowing, causing panic in the cabinet and the recognition that government intervention could be needed on a vast scale to support the cost of living. The Prime Minister told a private audience: ‘The assumption that the growth of the developed countries can proceed steadily on the basis of cheap energy has been shattered almost overnight.’ He further observed: ‘The problem is not simply one of inflation. It is the whole structure of the economy.’ In the Treasury there is something approaching a siege mentality. The
