Tag: UK

If you’ve been waiting for an update on my most important business and economic news of December, it is finally here. The holidays delayed its publication until now.

Analysis by the Centre for Policy Studies (CPS) puts the UK housing gap at 6.5 million homes. This conclusion is partly inferred from the following observation: “Britain has just 446 homes per 1,000 people, the second-worst rate in Europe. This compares with 560 in France, 516 in Germany, and a European average of 542.”

Given such a gap, it is no surprise that housing affordability in the UK, especially in London, has been on a steady decline since the beginning of this century. To close the housing gap by 2040, CPS estimates that “the UK needs to build 565,000 homes per year, more than double the current rate.”

Several factors are responsible for this supply crunch, and supply is a reasonable area of focus. Rising demand is not the issue. Why would one want to suppress demand, which signals economic opportunity? The supply crunch is due to regulatory issues.

These range from land-use restrictions and administrative delays to environmental mandates. Together, they have crippled the supply side of housing.

In December, however, the government took an important step towards addressing this through a bill called the Planning and Infrastructure Bill. The bill’s aims can be summarised as follows:

• Slashing delays and costs to get homes and critical infrastructure built faster
• Introducing sweeping measures to accelerate reservoir construction and prioritise electricity connections to drive growth, create high-paying jobs, and bolster home-grown clean energy
• Plans to build 1.5 million homes and meet a target of 150 decisions on major infrastructure projects

This represents a major step towards easing this burden. It is a landmark effort that led Propertymarket (via The Intermediary), the UK’s leading professional body for property agents, to call 2025 “one of the most significant year for housing reform across the UK.”

This was the most important piece of news for me, given how critical housing is to everyone and how directly a nation’s prosperity is linked to housing affordability.

I will be watching closely to see what comes of this. Already, as of this morning, the Financial Times has reported a slower rate of increase in UK house prices, 0.6% in 2025 compared with analysts’ expectations of 1.2%. Housing affordability has also returned to pre-pandemic levels, after rising sharply beforehand.

Sources

• CPS Housing Gap Report
• ONS Affordability Report
• FT (Gift Article) – UK house prices rise less than expected in 2025 as growth slows
• 2025 marks one of the most transformative years for UK housing, Propertymark says

As the curtain closes on November, I have my candidate for the most important piece of economic and business news from the UK for you (if you missed previous months, see comment for links)

It’s about energy in the UK. First, let’s do some reality checks

1. ONS data found that energy bills became a much larger share of household spending for many: poorer households, in particular, saw a bigger proportion of their income go to fuel costs.
2. A recent study by PwC (2025) found that 89% of UK businesses surveyed said volatility in energy prices reduced their profits in the past 12 months.
3. ONS latest data (2025) shows that electricity prices for business users increased sharply: from ~14.8p per kWh in early 2021 to a peak of ~28.4p per kWh in late 2023. A rise of more than 90%. Although prices have receded slightly by late 2024, business electricity costs remain roughly 75% above early-2021 levels, pre-Ukraine war.

What this data shows is that energy is expensive for all, households and businesses. My understanding also reveals that the problem is not on the supply side, i.e., the high cost of energy in the UK is not driven by demand outstripping supply. It is simply driven by the fact that the UK energy framework favours expensive energy supply, directly or indirectly. And this narrative is only based on current demand. Globally, energy demand is projected to rise by about 40% in a decade.

Which brings me to the news of the month for the UK. Earlier in the year, the PM, Keir Starmer, gave a John Fingleton-led task force a mandate to “set out a path to getting affordable, fast nuclear power for Britain.” The committee has now completed their work and produced 47 sweeping recommendations that could help make building nuclear power affordable again. Why is this important?

One, nuclear energy provides long-term (40-60 years) stability of supply at a predictable cost. With demand also projected to continue to increase, nuclear energy could provide a cheaper source of energy to meet this demand, reduce households’ COL and make UK businesses competitive. And of course, there is AI in the mix here. Energy is agreed as the bottleneck for AI acceleration, which made even the US put focus on Nuclear Energy again, OKLO is a good example here that has generated low revenue but has accelerated in market cap in anticipation of its potential.

On this news, most media outlets have reported on it & the PM is expected to make some announcements about it today. So, a ray of hope.

I’d like to add a common theme here about the UK—being default risk-averse. The FT reported that “It is several orders of magnitude cheaper to [build an equivalent nuclear power plant] in Korea and the UAE.” The task force named the reason for this as “the UK’s excessive focus on eliminating risk.” In my London Business School classes, one thing that’s been consistently emphasised is the sensitivity of ROI to the cost of capital. And the above directly increases cost, reducing NPV.

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Update – January 6th, 2026

The issue of energy costs is a very serious one. Since energy is the lifeblood of industrialisation, and we cannot have an energy-poor country alongside an industrialising economy, failing to be painstaking in increasing energy consumption and reducing energy prices is an anti-growth strategy. The UK has a long way to go on this.

The Telegraph reported:

“Britain looks set to become not just the first country to industrialise, but the first to completely de-industrialise.” It continued:

It is perfectly clear what has gone wrong. Our obsession with Net Zero targets has left us with industrial energy prices that are twice those in France, and four times the US. The government has piled on extra taxes, from extra National Insurance for employers, to carbon levies, to landfill taxes that hit manufacturers harder than anyone. And planning rules make it impossible to build plants where they are needed.

Sources:

PwC – Rising energy demand tests UK business growth ambitions

ONS – Energy prices and their effect on households

ONS – The impact of higher energy costs on UK businesses: 2021 to 2024

Global Energy demand

When you think about the UK and take time to analyse all the news published about its business and economy, you could easily become depressed by the state of things. Government barely scraping by, businesses struggling to survive, consumers losing wealth — it’s often hard to find news that lifts you up. Well, that was the case until what I’m about to share.

As October was drawing to a close, I began reflecting on what I believed was the most important piece of business or economic news to come out of the UK. In case you missed it, I shared something similar in September — see the comment for the link.

For October, it was difficult to find one, but I kept hopeful. Then, while scrolling through Twitter, I came across a post gaining traction among people I follow. It was a speech delivered by Matt Clifford: a 14-minute talk that has since gained even more attention, now surpassing 500,000 views since it was first posted.

It’s a simple message built on the premise that the UK in October, through deliberate effort, was once a great nation — breaking new scientific ground, constructing century-defining monuments, and fostering a population growing in wealth. The premise continues with the idea that the UK can be that again. I agree. The details of the talk are even more compelling, with vivid examples that truly fire the imagination.

For me, this speech is the most important piece of news to have come out of the UK. It’s a rallying cry and a message of optimism. Yet I sense that what Matt is doing has not yet gained national attention. I say this because I had expected the major media outlets to plaster their front pages with this message — but I could hardly find any that referenced the speech.

Ilan Gur, CEO of ARIA, who is also involved in this groundwork, captures my sense of the situation well in his recent interview with The Times: “The entrepreneurial drive, the ‘critical mass’ that is essential to scientific success, is a relatively recent development in Britain.”

My proposal for the UK government to “make the UK rich again” is this:

The UK has paid an enormous price for its anti-growth policies; now it should be prepared to pay at least twice that for pro-growth ones. In reality, the cost would likely be lower — but it helps to think of it that way. It would mean losing some control, making some mistakes, and facing public backlash, but that pales in comparison to the price being paid now. Look at what’s been done with the Advanced Research + Invention Agency (ARIA) – we can do more.

Note: I have a longer reflection on this topic. If you know a reputable media outlet where I could publish it, please DM me. I’d appreciate it!

For me, the most important business story of September out of the UK was the news of Kraken being spun out of Octopus Energy to become an independent company — valued at $10 billion.

In an earlier post I made on Twitter, I expressed how impressed I am with the success of the company. It’s a peerless story and one that makes for a great study: how a radical focus on customer satisfaction, enabled by technological innovation, can create tremendous shareholder value — even in a sector as old as energy.

The Financial Times reported: Octopus Energy is spinning off its software arm after several years of rapid growth, in a move it said would allow Kraken to speed up expansion across the world and achieve its target of serving 1bn people in the next decade.

The FT, quoting Greg Jackson, noted how he described the initial target of Kraken serving 100m accounts as now “embarrassingly low” and said: “It looks like it’ll beat that and can now aim to serve a billion people over the next decade.”

To achieve this billion-people goal, Kraken is becoming an independent company. It deserves it, as I noted in an earlier post.

Why do I think it’s the most important business story of September?

1. Kraken was developed internally to help Octopus deliver a peerless customer experience. On the strength of Kraken, in less than a decade, Octopus has become the no. 1 energy provider in the UK, overtaking British Gas.
2. Kraken has fundamentally changed how energy is priced, supplied, and sold — so effectively that even Octopus’s competitors are now implementing the technology.
3. Creating a $10 billion valuation in the UK energy sector for such a young company is unprecedented.
4. It accelerates the energy transition. Kraken is not just software — it’s infrastructure for integrating renewables, electric vehicles, and smart grids. Its scale-up could speed up decarbonisation in multiple countries.
5. It highlights a new model of value creation in utilities. Historically, energy companies competed on price or supply scale. Kraken demonstrates how data, software, and innovation can be the true differentiators in a centuries-old industry.

Hopefully, my excitement is obvious in the post. 😊

My note on Octopus and Kraken – on Twitter