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For Professional Clients and, in Switzerland, for Qualified Investors only. In Israel for Sophisticated Investors only.
English
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© 2021. BNY Mellon Investment Management EMEA Limited. All rights reserved.
IDEAS AND KNOWLEDGE TO INSPIRE YOUR INVESTMENTS THINKING
30 September 2021

Is there a hidden upside to rising energy prices?

For too long – and often for political reasons – retail energy prices have been kept at artificially low levels.

 

Now, thanks to a perfect concatenation of unfortunate events, that’s about to change and retail customers could face a long, hard winter of rising prices.

 

The silver lining to this hardship – if there is one – is that over the long run it could help wean society off its current reliance on oil and gas as its main source of energy and encourage the build-out of the renewable energy assets needed to address climate change.

 

There might be other positive side-effects too – such as encouraging householders to invest more in home insulation or hastening the switch to carbon-neutral fuels such as hydrogen.

 

Even so, government will have a role in blunting price increases if they begin to take up too great a percentage of people’s incomes – especially low-income families. As ever, the priority is to balance what we need from an environmental standpoint with what’s achievable – particularly as we build on the post-pandemic economic recovery.

 

Paul Flood, multi-asset manager, Newton Investment Management.

 

Doc ID: 716950

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Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Managers Limited (BNYMFM), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.

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