Forex Flash: Energy market microcosms - Nomura

Nomura economist Phillip Rush comments that regulatory-driven changes to the energy market’s structure are squeezing UK electricity generation capacity and it is at the detriment of price.

He feels that greater reliance on gas is the official answer, despite its reduced abundance. He writes, “The US’s shale gas “miracle” is unlikely to be replicated in Europe and transatlantic arbitrage is not effective. This continues to contribute to the UK’s unfavourable inflation, real income and thus GDP growth performance relative to the US.”