Escalating UK energy prices could force up to a quarter of manufacturing businesses to set up facilities overseas, a lobby group has warned.

Manufacturing industry group EEF says energy prices are projected to climb 50% by 2020, hitting investment, margins and competitiveness for businesses in the UK.

According to a survey published by the group today, nearly three-quarters of manufacturers said rising electricity costs would have a noticeable impact on margins, while more than half said it would hit competitiveness.

EEF said green policies and pollution targets were to blame and that these should be reviewed by parties vying for government positions at the next election.

“Low carbon is rapidly becoming synonymous with anti-competitive, which is why we are urging all parties vying for government to commit to review and reform current policies and mechanisms,” Gareth Stace, head of climate and environment policy at EEF.

Under climate change agreements, UK producers receive a tax cut in exchange for hitting targets for reduced CO2 output.