High energy costs in the UK are starting to bite on investment decisions, with the US ambassador warning that businesses are thinking twice about putting capital into Britain.
Speaking at the British Chamber of Commerce, US Ambassador Warren Stephens said American firms are increasingly raising concerns about the cost of operating in the UK, particularly when it comes to energy.
He said: “Or when US businesses say energy costs are too high for them to make investments here, we want to make sure UK decision-makers are aware of those concerns.”
The warning lands at a sensitive moment. While wholesale prices have fallen from the peaks seen after Russia’s invasion of Ukraine, businesses are still dealing with structurally higher costs, especially in energy-intensive sectors where margins are tight and global competition is fierce. Add to that recent price hikes due to the Iran War and things start to get dicey.
Ambassador Stephens made clear this is not just an issue for overseas investors.
“And frankly, that is a concern of UK companies as well,” he said, underlining that domestic firms are facing the same pressures as international capital when weighing up where to grow.
The ambassador also suggested the UK has more control over its energy costs than it sometimes admits, pointing to domestic supply.
“Because the UK could certainly have more influence over its domestic energy pricing, if not be a price setter by using its domestic fossil fuel reserves,” he said.
His intervention cuts into a wider debate about how the UK balances affordability, security and decarbonisation.
With geopolitical tensions in the Middle East adding fresh volatility to global energy markets, the cost of power is once again front and centre in economic policy.
“The solution here is energy addition, not subtraction,” said the Ambassador, adding that “in the modern economy, we need all forms of energy on the table, including oil and gas.”
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