The government claims to be fixing the economy but households may face more pressure in the months ahead
Labour swept to power in the wake of a cost of living crisis that hit households hard, with the price of food and energy rocketing alongside the impact of Liz Truss’s disastrous mini-budget on mortgage rates.
At 2.3%, inflation is nowhere the 10% peak after Russia’s invasion of Ukraine, but it is creeping up, and could hit 3% in 2025, say forecasters.
Continue reading...Rolling coverage of the latest economic and financial news
Begbies Traynor also reveals that their employment costs are expected to rise by £1.25m due to the increase in employers’ national insurance contributions.
The company is “reviewing options to mitigate the impact where possible”.
“Additional headwinds for UK business from increased employment costs and the prospect of higher for longer interest rates are likely to extend the period of elevated insolvency levels, increasing the need for advice and support from our insolvency and business recovery professionals.”
“We have made a very good start to the year with double digit growth in revenue and profits driven by positive momentum across the group. This gives us confidence that we will deliver market expectations for the year as a whole.
Continue reading...Price cap for Great Britain forecast to rise to £1,736 a year for average dual-fuel bill, according to Cornwall Insights
Britons have been warned to expect a “disappointing” rise in energy bills in January, adding pressure to household finances, despite earlier hopes that prices may ease early next year.
The price cap for Great Britain is forecast to rise to £1,736 a year for the average dual-fuel bill, according to Cornwall Insights, a well-respected energy consultancy. This is a rise of 1% from the current price cap, which increased last month to £1,717 a year for a typical consumer.
Continue reading...Energy crisis panel warns country is ‘dangerously unprepared’ and must shift away from gas quickly
Britain is at risk of experiencing a repeat of the sharp increase in energy costs which has fuelled the continuing cost of living crisis because it relies too heavily on gas, according to an expert panel of industry leaders.
The Energy Crisis Commission has warned that the UK is still “dangerously underprepared” for another crisis because it continues to rely on gas for its power plants and home heating.
Continue reading...Party donor Dale Vince warns that urging homeowners to switch to clean-power technology risks political storm bigger than Ulez
The government risks a huge political backlash if it keeps pushing the public to install heat pumps to replace their boilers, one of Britain’s leading green entrepreneurs has warned.
Dale Vince, a major Labour donor and renewable energy advocate, called on Keir Starmer to rethink national programmes, championed by Boris Johnson, pushing the technology. Vince argued that Whitehall should explore alternatives to the devices, which he said were expensive, caused serious disruption and could end up increasing energy bills for some people.
Continue reading...Customer disputes over sewage spills, billing mistakes and water meters soar in past year
The number of customer complaints that were unable to be resolved by water companies in England and Wales has risen by almost a third to the highest level in nearly a decade.
There was a 29% increase in 2023-24 in cases escalated to the Consumer Council for Water (CCW) by households that failed to achieve a resolution from their supplier, the watchdog said.
Continue reading...Consumer champion urges consumers to head to a price comparison website to find a cheaper deal
The consumer champion Martin Lewis has said that the energy price cap should be called the energy “pants cap” because there are much cheaper energy deals available.
The cap is adjusted every quarter by Ofgem, the energy regulator for Great Britain, and imposes a maximum on how much suppliers can charge customers for each unit of gas and electricity. On Tuesday it increased by nearly £150 to the equivalent of £1,717 a year for an average dual-fuel household paying by direct debit.
Continue reading...Businesses in England and Wales say they are paying for ‘historic errors’ by water suppliers
Small businesses have accused water suppliers of saddling them with the cost of “historic errors” made by bosses in the scandal-hit industry, as it emerged their bills will rise nearly 30% by 2030.
The water industry regulator, Ofwat, has told businesses that it expects average wholesale charges for non-household customers – which include small firms, charities and hospitals – to increase by about 27% before inflation over the next five years, outstripping the anticipated rise in household bills.
Continue reading...A surge in claims for pension credit will make thousands more people eligible for the payments and other benefits
Rachel Reeves has been warned that her cut to pensioner winter fuel payments risks saving hundreds of millions less than anticipated, in a new blow to her attempts to close the hole in Britain’s finances.
The chancellor and her Treasury team are already re-examining parts of a plan to crack down on non-dom tax status over concerns that it may not raise any money.
Continue reading...A further 175,000 pensioners are likely to stop receiving allowance under such plans, official figures show
A further 175,000 pensioners could lose the winter fuel allowance if the benefit becomes means tested, data suggests.
About 11.6 million people in the UK received the benefit last winter, an increase of 214,000 on the previous year, according to figures released on Tuesday by the Department for Work and Pensions (DWP). The overwhelming majority are to have this removed this winter under plans announced by the Labour government to cut spending on the benefit.
Continue reading...While Commons rebellion was small-scale, behind the scenes, anger over handling of the policy is said to run high
In the end, the vote to cut the winter fuel allowance passed easily. Hundreds of loyalist Labour MPs tramped through the lobbies to back the government’s controversial plan. No 10 will hope the heat has gone out of the issue.
But despite dodging a major rebellion, plenty in government were not taking much comfort from the result. Scores of MPs abstained in silent protest, fearful that they could be condemning vulnerable pensioners to a cold, hard winter.
Continue reading...Exclusive: Debt-ridden company also warned officials of ‘chilling effect’ of any renationalisation
Thames Water has lobbied the government to intervene with the regulator to allow it to charge far higher bills, the Guardian can reveal.
Advisers and board members of the beleaguered water company are understood to have met Whitehall officials in recent weeks to say that allowing it to be temporarily renationalised would have a “chilling effect” on the entire UK’s appeal to international investors, sources familiar with the discussions told the Guardian.
Continue reading...Government discusses measures after criticism over cuts to winter fuel payments
Ministers have committed to help households struggling with their gas and electricity bills this winter after energy industry bosses warned that consumer debt had climbed to more than £3bn.
With Labour under fire for scrapping universal winter fuel payments to pensioners, ministers met energy industry bosses on Wednesday to discuss ways of supporting struggling households through the coming colder months.
Continue reading...Debt-laden company tells Ofwat if it cannot charge customers 59% more, it ‘would prevent company turnaround and recovery’
Thames Water has said it will be unable to recover from its funding crisis if it is blocked from charging customers significantly more, as it proposed to pile an extra £228 a year on to household bills.
The debt-laden company said the increase to bills that has been proposed by the industry regulator, Ofwat, leaves its activities “neither financeable nor investible”.
Continue reading...Labour leader tells working people rot left by Conservatives is so much worse than imagined and improvement won’t happen overnight
British people will have to endure even worse economic and social pressures in the months to come as the Labour government takes “unpopular decisions” to rebuild the country from “rubble and ruin” left by the Tories, Keir Starmer will warn this week.
With the prime minister under mounting pressure from within his own party to help people struggling with rising fuel payments and millions of families in poverty, Starmer will strike a defiant note against those demanding U-turns from his ministers, saying “tough choices” will have to be made before any recovery is possible.
Continue reading...As the winter fuel allowance is scrapped for many pensioners, we outline some other key benefits
• Millions facing ‘cruel winter’ without fuel payments, Labour MPs warn
Labour backbenchers are warning that millions of vulnerable people will face a “cruel winter” amid rising energy prices and a reduction in benefits, including the removal of winter fuel payments for millions of pensioners.
Keir Starmer’s government has promised to improve conditions for those most in need, with a commitment to “reduce and alleviate” child poverty and end the “moral scar” of food banks. And while Labour sees economic growth and creating more reliable and well-paid jobs as crucial to achieving these aims, it cannot ignore a number of pressing and often interrelated problems in the social security and benefits system.
Continue reading...Backbenchers say end to support schemes would be ‘wrong measure’ that ignores struggle of poorest households
• Which benefits are available to vulnerable people?
Millions of vulnerable people face a “cruel winter” owing to a combination of rising energy costs and government cuts to welfare schemes, Labour MPs and campaigners have warned, as Keir Starmer comes under pressure to extend key financial support programmes.
Labour backbenchers are calling on the prime minister to reverse or mitigate the government’s decision to end winter fuel payments for millions of pensioners and to extend the household support fund (HSF), which is due to run out in September.
Continue reading...Campaigners fear increase by £149 in energy price cap by Ofgem will put more pressure on households
Households will begin the run-up to winter with a sharp increase in their energy bills after the industry regulator increased its cap on energy prices by 9.5% from October.
Under the new price cap, the average annual energy bill will rise to £1,717 a year for gas and electricity, up £149 from its current level of £1,568, which has been in place since July.
Continue reading...The economist behind the Covid furlough scheme has called for ‘unfair’ council tax and stamp duty to be axed
Council tax and stamp duty are “unfair and unpopular” taxes that should be abolished, says the economist who devised the Covid furlough scheme.
Tim Leunig, who has advised a series of cabinet ministers, including Rishi Sunak during his prime ministership, said it was time for a new and radical approach that would axe the two taxes and replace them with proportional levies.
Continue reading...New analysis shows tens of thousands of older people may end up worse off than those who retain energy benefit
Tens of thousands of pensioners are on a financial cliff edge because of the government’s decision to radically restrict winter fuel payments, a new analysis has revealed. The chancellor, Rachel Reeves, opted to introduce a means test for the payments, with only those on pension credit qualifying, stating it was one of the “difficult decisions” she had to make, as she accused the Tories of leaving £22bn in unfunded commitments.
The decision removes the payments from about 10 million pensioners in England and Wales. Officials said this weekend the policy would be among a package of measures “to fix the foundations of the economy”.
Continue reading...