Inflation is a topic currently on everyone’s mind (Report, May 21). UK inflation has hit a 40-year high of 9 per cent, leading to widespread speculation that a recession is looming for one of Europe’s largest economies.

Many commentators have highlighted the significant parallels with the energy crisis of the 1970s. A political conflict led to a deliberate disruption of supply chains and a consequent surge in energy prices. The ensuing recession differed from many of its predecessors by causing stagflation — high inflation coinciding with high unemployment.

There is no doubt that things are going to get worse before they get better. Several of the UK’s most senior economists are forecasting double-digit inflation levels for the rest of this year.

However, we can look beyond the signs of doom and gloom and see this as an opportunity. Sound familiar? Hot on the tails of another recent external event causing a global economic shake up, this shock to energy prices has the potential to spark the energy transition in the same way that Covid-19 accelerated the digital transformation years ahead of the agenda. The combination of high inflation associated with non-renewables and sovereignty concerns regarding energy security is the perfect catalyst for renewables to become mainstream, both as a more economical and reliable source of energy.

The UK should be doubling down on investing in energy storage, to unlock the widescale uptake of renewables, leave behind oil and gas, and transition towards a net zero carbon economy.

Natalie Chapman
Cambridge Judge Business School
University of Cambridge, UK