A new report today suggests that Russia's invasion of Ukraine will have long-lasting effects on energy supply and markets.

The International Energy Agency (IEA) said the world faces its first "truly global energy crisis" as a result.

It added that unaffordable energy bills remain a huge problem, driven up as the exports of oil and gas have been restricted.

But the crisis should also be seen as a turning point - speeding up the world's transition to green energy, it said.

"With unrelenting geopolitical and economic concerns, energy markets remain extremely vulnerable, and the crisis is a reminder of the fragility and unsustainability of the current global energy system.

"The heaviest burden is falling on poorer households where a larger share of income is spent on energy," the study warned.

The BBC says the Paris-based agency calculated the value of government spending to protect customers from price rises currently stands at £473billion worldwide, and is set to rise further - particularly in the UK and Germany.

The IEA said the most effective policies to protect customers from the impact of soaring costs, and changing energy infrastructure, had been introduced by the likes of the US, Japan and Korea.

Fracking ban

Meanwhile, new Prime Minister Rishi Sunak yesterday confirmed that the ban on fracking in England is being restored.

Also during his first Prime Minister's Questions yesterday, he would not commit to increasing benefits in line with prices. However, Mr Sunak said he would continue to "protect the most vulnerable".

His spokesman also refused to comment to the BBC on whether the state pension would rise with inflation ahead of a delayed statement by the chancellor next month.

Jeremy Hunt is now due to set out the government's plans for tax and spending on Thursday, November 17.

The much-anticipated annoucement was due next Monday, but the chancellor said moving it back would mean it was based on the "most accurate" economic forecasts.

Mr Hunt had already scrapped his predecessor's proposals for huge tax cuts, which had sparked market turmoil due to fears over how they would be paid for.

Paying less interest

Calmer market conditions mean the government will not have to pay as much interest on money it borrows because it is not considered as much of a risk.

Official projections suggest that the government's bill for the interest on its debt could be up to £10billion lower than feared just a few weeks ago.

This could potentially change how much it needs to cut spending and raise taxes by to balance the books and possibly delay big spending cuts or tax rises until after 2024.

The economic plan will now be "upgraded" to a full autumn statement, suggesting wider tax decisions will be announced.

It will be accompanied by a report from the Office for Budget Responsibility which gives independent forecasts on what the impact the plans are likely to have on growth and spending.

The previous PM, Liz Truss, announced her decision to lift the ban in England on fracking, which involves drilling into the earth to recover gas from shale rock.

Bills rising

With energy bills rising, she argued fracking could boost the UK's gas supplies.

But the move provoked a backlash from many Conservative MPs because of concerns about earth tremors.

The controversial process was halted in 2019 following opposition from environmental groups and local communities.

Labour and other opposition parties were also against the return of fracking.

Asked by Green MP Caroline Lucas if he would restore the moratorium on fracking pledged in the Conservatives' 2019 manifesto, Mr Sunak said: "I have already said I stand by the manifesto on that."

The Tories' general election manifesto said the party would not support fracking unless the science showed "categorically" that it could be carried out safely.

Committed to promise

The PM's official spokesman later confirmed Mr Sunak was committed to this promise.

The move was welcomed by environmental groups, with Friends of the Earth describing it as a "fantastic victory for common sense".

Chaos surrounding a vote on fracking, brought by Labour last week, contributed to Ms Truss's swift downfall, just 44 days after she took office.

In the past consent to begin fracking has been given only for two sites in Lancashire, neither of which are now in operation.

  • At the end of 2019, the Scottish Government set out a finalised policy of no support for unconventional oil and gas (UOG) development, which includes fracking. It will not issue licences for new UOG development, and Scotland's planning framework will not support development using UOG extraction techniques.

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