A no-deal UK exit from the European Union next March could lead to a rise of GBP61 ($78) per year on consumer power and gas bills in the event of further devaluation of the pound, according to new research Monday from University College London.
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Sign Up Consumers were already paying GBP75 more on average in the year after the EU referendum due to the falling value of sterling against the euro and the US dollar, directly reflecting the higher cost of energy imports, UCL said.
"The exchange rate depreciation plus the fact that energy prices are now much more volatile means consumers have been paying more and are facing even higher bills over the next several months," said Giorgio Castagneto Gissey of UCL Bartlett School of Environment, Energy & Resources.
Energy bills increased overall by GBP2 billion in 2017 due to devaluation in the pound, with average wholesale prices of electricity and gas rising by 18% and 16% respectively in the year after the referendum, the research showed.
A further GBP1.5 billion could be added to the annual bill from the end of March 2019 to the end of March 2020 in the event of a hard Brexit, UCL said.
The prediction is based on an assumption of a further depreciation of sterling to sterling-euro parity, with a 12% drop from the exchange rate of 1.14 on November 3, 2018.
Co-author Professor Michael Grubb said: "forecasts always carry some uncertainty, but this research pinpoints historical fact: the referendum result, through its impact on exchange rates, has been the principal factor driving up UK household energy prices over the past two years."
On Tuesday the UK Parliament is due to vote on an EU withdrawal treaty, with dozens of Conservative MPs set to vote against the deal.
