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Energy, Pensions And Reform: Christodoulides Outlines Government Priorities

Lowering electricity costs remains at the heart of the Cypriot government’s agenda, with President Nikos Christodoulides describing energy reform as the administration’s most urgent challenge despite recent measures aimed at easing pressure on households.

Speaking during an interview with ANT1, the president said reducing electricity prices continues to be the government’s immediate focus, while broader reforms are centred on expanding renewable energy generation and strengthening the country’s energy infrastructure.

Renewables And Storage

According to Christodoulides, Cyprus has increased the share of renewable energy in its electricity mix from around 17–18% when his administration took office to approximately 25–26%. While describing the progress as encouraging, he argued that significantly higher levels will be needed in the coming years.

A key priority, he said, is expanding energy storage capacity, which would allow renewable electricity to be stored more efficiently and improve the stability of the national grid. The first storage systems are expected to begin operating this year.

Pension Reform Moves Forward

Beyond energy, the government is also preparing legislation to overhaul the pension system. Christodoulides said discussions between the Ministries of Labour and Finance are nearing completion, with the proposed reform expected to increase lower pensions by between €250 and €300, depending on the category.

He also urged Parliament to move quickly once the legislation is submitted so that beneficiaries do not face unnecessary delays.

No Decision Yet On 2028

The president declined to confirm whether he intends to seek a second term, saying he will decide during 2027 after assessing the government’s progress in delivering its programme.

Rejecting claims that his administration has already shifted into election mode, Christodoulides said his priority remains implementing reforms rather than preparing for the next presidential race.

Defending The Government’s Record

The interview also touched on corruption, crisis management and cooperation with Parliament. Christodoulides argued that strengthening the Independent Anti-Corruption Authority demonstrates the government’s commitment to improving transparency, while pointing to changes introduced after last year’s wildfires and the drone incident at the British Bases as examples of lessons that have strengthened Cyprus’ emergency response systems.

Bank Of England Holds Rates At 3.75% In Split Vote As Inflation Risks Rise

The Bank of England kept its benchmark interest rate at 3.75% on Thursday, but the decision was not unanimous. In a 6-3 vote, the Monetary Policy Committee kept rates unchanged, while three members backed a 25-basis-point increase to 4%. Renewed energy price pressures have added to concerns that inflation could remain elevated.

Inflation Pressures Remain

Policymakers said inflation “is likely to rise further over coming quarters,” citing higher and more volatile crude oil and refined energy prices since the conflict began.

So far, there has been “little evidence” of significant second-round effects, such as broader wage and price increases. Inflation risks, however, are now “tilted to the upside” and have increased since the July Monetary Policy Report.

Energy Prices Add To Inflation Risks

Brent crude has risen 36% since July, reaching $106 a barrel on Sept. 14, while UK wholesale gas prices increased 78% to 207 pence per therm.

Higher energy costs can feed into transport, production and household expenses, raising costs across supply chains. Refinery pressures have also pushed crack spreads, the difference between refined fuel and crude prices, well above pre-conflict levels.

Economy Shows Resilience

Despite the inflation risks, UK economic activity has held up slightly better than the Bank expected. A softer labor market and higher borrowing costs are expected to help reduce inflation over time.

Previous monetary tightening is still working through the economy, according to policymakers. So far, the latest energy shock has not produced clear evidence of a broader wage-price spiral.

Major Central Banks Take Different Paths

The decision comes during a busy period for global monetary policy. The Federal Reserve raised rates Wednesday to 3.75%-4% in its first increase since 2023, while the European Central Bank recently lifted its deposit rate to 2.5%.

The Bank of Japan is due to announce its decision Friday, with markets expecting a rate increase. Thursday’s split vote shows that pressure for tighter policy remains within the Bank of England’s Monetary Policy Committee.

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