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Comment by fxtentacle | Hacker News Reader

game studios (== recreational non-essential spending) are most likely affected first. Prepare for increased job competition and stagnating wages in general.

But panick? not unless you live in the UK. I'd expect mainland EU to continue almost as usual, with maybe a few high-energy factories shutting down. But since most of the jobs are service sector anyway, I wouldn't worry too much.

I heard the news that in Germany a car part supplier started bankruptcy proceedings. But that's only 2000 jobs out of 84 million people. And all those coal and steel factories were only very few jobs, too.

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Game studios were quite recession proof in the past. During bad times, people look to entertainment.

So, as I'm in the UK.. Why should I be panicking?

Aside from ridiculous increases in energy costs, it's really not feeling any different.

> Aside from ridiculous increases in energy costs, it's really not feeling any different.

That's a pretty enormous aside. Some countries like France are capping energy prices to make sure people can afford to get electricity and heating. Meanwhile in the UK you've already had energy prices go what, double? triple? And it's not even winter yet! If you now suddenly have a chunk of the population who can't afford energy, things aren't doing great.

Looks like they will be capped soon in the UK, but this only means that Government (e.g. us) will be subsidizing the big power companies. As big power companies buy (hedge) their power way in advance, we'll need a longish 6+ months period of stability before they will be able to start selling cheaply again. Also all those tiny suppliers that sprang up and had to buy on the spot market have gone bust (no hedging) so there will be less competition in the market over the next few years.

I see what you mean, I guess my tolerance for panicking is quite high! It's been a shit show here since we left EU heh.

Why panic if you’re in the UK? They’re less exposed to Russian gas than continental Europe.

You'd think. But UK is less well governed: among other things Brexit has brought its own special brand of GDP inhibition.

https://edition.cnn.com/2022/08/19/energy/energy-prices-uk-e...

As wholesale costs ballooned last year, 31 smaller UK energy companies — who traditionally offered competitive prices — went bust, forcing millions of customers onto the books of bigger suppliers, and to pay higher bills.

The way the British government designed the energy market made this more likely, Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN Business.

Brexit has got next to nothing to do with the current energy crisis in the UK: it's a worldwide problem, and even the CNN article you've cited claims it's not Brexit that's made it worse in the UK than elsewhere.

True but it's a factor unique to the UK adding even further to the economic woes that energy costs bring, hence it belongs in responding to "why panic in the UK?". Covid lagging impacts plus Brexit plus energy prices is all pretty grim. And now Rees bloody Mogg is the Business and Energy Minister. Sheesh...

That report missed that the issue was because the cap was designed to prevent suppliers exploiting customers who don’t switch supplier regularly to get better deals. It ended up with smaller suppliers that act as brokers to lose money in the current market. It was not a catastrophic issue.

Where I live in the US, the power company is National Grid, headquartered in London. I believe that customers can select a different energy supplier, while paying National Grid for connection and delivery. So it sounds like you are talking about a similar system.

I'm not sure of the state of the market, and I've never tried changing my supplier, but I do notice the electricity supply rate has more than doubled year-over-year.

My understanding is that most of the power here comes from Canadian hydro, so that seems to tell you something about the usual explanations for price changes.

they have virtually no storage capacity and are highly reliant on gas for heating and electricity generation, more so than the continent. Gas prices are global so it doesn't matter whether your gas is Russian or not. The UK government is already preparing to spend almost 200 billion on stabilizing prices. (that's more than the NHS and military combined).

>The UK government is already preparing to spend almost 200 billion on stabilizing prices

I notice public figures saying (paraphrasing) "why shouldn't the current bout of inflation be like the 70s". And I think "because they were trying to maintain the gold standard for way too long and that's what got it going?"

Spending vast amounts on "stabilizing energy prices" seems like essentially the same sort of mistake.

I wonder why other countries falter in emulating the Federal Reserve, which seems to have learned something from history despite all its critics.

I think the idea is to use that money to stop higher energy prices driving inflation

It's not free though, you have to either raise taxes or increase debt, both of those options have some unpleasant consequences.

https://uk.news.yahoo.com/energy-crisis-why-uk-worst-1036542...

Weren't video games one of the "recession-proof" industries?

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