UK Energy Shock Reaches 2022 Footprint with Different Economic Implications

The UK is experiencing an energy shock that's similar to the one in 2022, when Russia invaded Ukraine. Energy accounts for 42.1% of the absolute UK inflation signal, almost identical to September 2022. However, the current episode has so far produced a very different pattern across the wider economy.

New analysis from Permutable shows that during Q3 2022, energy accounted for 42.7% of the absolute UK inflation signal, while in Q2 2026, it's at 42.1%. The two episodes produce similar headline readings but for different reasons.

In 2022, the energy shock spread rapidly into the wider inflation basket, particularly food. In contrast, the current episode has remained concentrated on energy. Permutable's directional inflation data recorded an energy score of 1,201 in Q2 2026, while food stood at 134 and services at 190.

Jack Watson, Market Analyst at Permutable, said: 'The key question is whether higher energy costs begin feeding into food, goods, wages, services, and inflation expectations.' So far, there's little evidence of sustained second-round effects. Food manufacturers have reported absorbing higher energy, packaging, and logistics costs in margins.