Britain’s Cost Pressures Are Becoming Structural

NatWest argues the UK economy is entering a more difficult phase where rising energy costs, weakening housing momentum, and structural labour-market problems increasingly reinforce one another. 

• UK energy bills are set to rise another 13% this summer, with gas prices surging far faster than electricity due to Middle East-driven commodity pressures.
• The housing market remains relatively resilient for now, though Nationwide data showed prices falling 0.6% in May, the first monthly decline this year.
• NatWest also highlights the growing youth inactivity crisis, with nearly 957,000 young people classified as NEET and structural labour shortages increasingly weighing on long-term growth prospects.

The broader concern running through the report is that Britain’s inflation problem is no longer purely cyclical, but increasingly tied to structural weaknesses in energy, labour supply, and household affordability.