It was April 28, 2025, around midday, when Spain – and parts of Portugal – was disconnected from the modern world. In a moment, trains halted, metros were evacuated and the Bolsa de Madrid went dark. Telecom lines went silent; traffic lights stopped working; hospitals flicked on backup generators. The blackout, which lasted up to 20 hours in the vast majority of places, exposed how vulnerable we are in much of our everyday lives to the security and stability of the energy grid.
A short flight away from the UK, we should look at what happened in Spain as a warning. While our power system hasn’t tripped wholesale yet, we’re staring down similar vulnerabilities. Electricity bills remain stubbornly high, despite the push for new renewable generation sources, as gas-fired plants still dictate wholesale pricing nearly all the time. At the same time, the decision has been to keep our domestic gas in the ground and maintain our dependency on imports. In reality, though energy prices have eased since the 2022 crisis, they remain well above pre-crisis levels with no significant reprieve in sight.
All of that leads to frequent alarm about potential power cuts and the fragility of the UK network. However, one crucial angle is often missed. When the electricity stops, what happens to the financial services that we depend on?
Most energy debates focus on domestic comfort or grid capacity, not the fact that your bank app, ATMs, payment networks and even business transfer systems all depend on electricity and communications. We either assume it won’t happen, or if it does, we hope that there are sufficient mitigations in place.
In Spain, there was some intrinsic protection as it is one of the most cash-dependent countries in Europe – with 57% of point of sale transactions paid for using cash. When the blackout hit, ATMs, mobile payments and card systems struggled or failed – forcing consumers and small shops to rely on their cash reserves. That dependence on cash was a mitigation that the UK – with only 12% of sales made in cash – is unlikely to benefit from.
That realisation inspired the Swift Centre for Applied Forecasting to ask its expert forecasters to gauge the risk of a sustained blackout in the UK, specifically looking at: the likelihood of a blackout lasting over 24 hours; the change a severe winter may make; and if it did occur, could such an event cause 100,000 people to lose access to their bank accounts.
What emerged from the Swift Centre’s analysis was unsettling: the forecasters estimate we face an 8% chance of a blackout that lasts over 24 hours before the end of 2026, and if a severe winter occurs, the likelihood almost doubles to 15%. Under average conditions, the UK might seem resilient. But factor in sub-zero temperatures, low wind or extreme storms, and we face a substantial risk.
If the worst happens, the impact would be widespread, with huge numbers of people potentially losing access to the ability to conduct payments or withdraw cash. The Swift Centre’s forecasters investigated the base rates, historical comparisons, the current context and the weaknesses in linked dependencies in the current financial system. They assessed that, if a 24-hour blackout did occur, then there was a 58% chance that 100,000 citizens or more would find themselves unable to access their bank account to withdraw, transfer or access funds.
As Sarah Breeden, Deputy Governor at the Bank of England recently put it, ‘Financial stability means the financial system provides vital services to households and businesses reliably in all states of the world, even when shocks hit’. As these new forecasts from the Swift Centre highlight, blackouts should not be overlooked in the list of possible shocks.
If a ‘severe but plausible’ blackout scenario hits the UK before the end of next year, it’s more likely than not that over 100,000 people would be unable to access their bank accounts. Until more is done to shore up the resilience of our energy system, we can’t assume it won’t happen here.
