A new report from the Green Alliance has shown that the rise of commodity prices over the last decade has increased inflation and significantly pushed up prices for UK consumers.
Written by Green Alliance chief economist Julian Morgan, the report describes the situation as the ‘great resource price shock’ and notes that metal prices have trebled, energy prices have quadrupled and food prices have doubled.
The report finds that inflation would have been 2.1 per cent, instead of 2.6 per cent on average over the last decade.
While it predicts that if the price shock continues, by 2020 household food and energy bills could have risen by another £1,675 a year over general inflation.
The study makes the case for better resource stewardship as the only effective way to protect the UK economy against these risks.
Julian Morgan said: “When you take full account of the damage caused to our economy and living standards from rising resource prices over the last decade, the case to act becomes compelling. The only reliable way to reduce our vulnerability to future price rises is to improve how we manage and use resources.
“There are many ways we can do this, ranging from widespread insulation programmes for homes and offices, and more effective recycling and reuse of key materials. We need to put resource productivity at the heart of economic and business decision making if we want to make the UK more resilient to volatile commodity markets.”
The report was launched at the Resource exhibition at Excel in London.