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Jumat, 30 September 2022

Minister issues warning as government energy support package kicks in to cover huge spike in bills - Sky News

Consumers are being warned they may be targeted by scammers as the government's energy price guarantee comes into effect.

Messages asking for people to provide personal or financial details to receive support should be treated as fraudulent activity, as no applications are required, the business secretary has said.

The £400 Energy Bill Support Scheme will be applied automatically to bills each month between October and next March.

And the Energy Price Guarantee, which will limit the amount households pay per unit of gas and electricity, comes into effect from today.

In a statement, Jacob Rees-Mogg said: "Unprecedented government support is beginning this weekend, protecting families and businesses across the country from what was going to be an 80% increase in energy bills this winter.

"I also urge people today to stay alert to scams. This support will reach people automatically and there is no need to apply."

Earlier this month, Action Fraud - the UK's national reporting centre for fraud and cybercrime - said nearly 1,600 reports had been made to the National Fraud Intelligence Bureau (NFIB) about scam emails purporting to be about energy rebates from regulator, Ofgem.

Ministers say the Energy Price Guarantee should mean a typical household will pay about £2,500 per year, starting this month for the next two years - protecting them against what could have been, on average, an additional £1,000 a year on their energy bills.

The government has confirmed households in Northern Ireland will also receive the same support through the Energy Price Guarantee from November, with support for October bills backdated.

People who live in areas not served by the gas grid or who use alternative fuels such as heating oil will still receive a £100 support payment.

For the £400 Energy Bill Support Scheme, customers on pre-payment meters will receive a credit or vouchers direct from their electricity supplier.

Households have been urged to take a photograph of their meter reading and do what they can to cut their energy use as prices spike.

But after a massive surge in people submitting readings caused problems at many suppliers, Ofgem stressed that people did not need to all submit their readings by today.

"If you're planning to submit your meter reading by October 1, you can submit it a reasonable time after," the regulator said.

Support for businesses, charities and public sector organisations will also come into effect from today through the Energy Bill Relief Scheme.

The scheme will operate for six months and could be extended subject to a review.

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Ministers say the discounts it will provide on the price per unit of gas and electricity will result in payments of wholesale energy costs below half of what had been feared.

As the energy price cap comes into force, Prime Minister Liz Truss said: "Livelihoods and businesses were at stake. The government's energy support limits the price they pay for gas and electricity, shields them from massive bill increases, and is expected to curb inflation too.

"The cost of not acting would have been enormous."

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2022-09-30 21:40:45Z
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How much will my bills increase when the energy price cap comes in on 1 October? - Sky News

Gas and electricity bills are going up tomorrow as the new energy price cap takes effect.

You may have read that from 1 October the price cap will mean average energy bills will increase by 27% from £1,971 a year to £2,500.

But it isn't as simple as that.

House prices warning as growth slows to single digits - Economy latest

What is happening tomorrow?

The price of gas and electricity is determined by global wholesale prices, which shot up after supplies from Russia were cut as a response to the war in Ukraine - and after energy consumption increased again after COVID.

How much these wholesale energy prices are passed on to customers is controlled by the UK regulator Ofgem in the form of a price cap four times a year.

This price cap limits the cost households pay per unit of energy (kilowatt hours) they use.

Average annual bills had been touted to go up to £3,549 in line with wholesale prices, but Prime Minister Liz Truss's "energy price guarantee" has reduced the original price cap announced on 26 August.

It means that from 1 October, instead of paying a maximum of 28p per kWh for electricity - people will now pay 34p.

And instead of paying a maximum of 7p per kWh for gas - they will now pay 10.3p.

Standing charges, which are the cost of connecting to the National Grid, are also going up with the price cap, but not by very much.

From 1 October they will increase from 45p a day to 46p a day for electricity and 27p to 28p for gas.

Does the price cap cover everyone?

The price cap only covers domestic households in England, Wales and Scotland. The same level of support will be applied to the market in Northern Ireland.

Traditionally businesses are not covered by the price cap, but as part of a separate "energy bill relief" scheme, the government is providing additional support for firms.

You will be included in the price cap if you are a dual-fuel customer (use the same company for electricity and gas) on a standard variable tariff, who pays by direct debit, credit, or prepaid meter.

Standard variable tariffs mean your energy company can change the price per unit at any time - in line with global wholesale prices - but is limited by the price cap.

Fixed tariffs are agreed upon annually and mean the price per unit will not change for that year.

These are not included in the price cap, but the government says its energy price guarantee will mean a discount of 17p per kWh for electricity and 4.2p per kWh for gas.

They say this will bring fixed rates down to similar levels as the energy price cap.

If you are locked into an expensive fixed tariff, you can take a meter reading before 1 October to ensure your energy company honours the price guarantee discount.

Price cap does not mean energy only costs £2,500 a year

The government estimates that the new price cap will result in average annual energy bills increasing from £1,971 to £2,500.

But that does not mean people won't be charged more than £2,500 a year for their energy - it is just an estimate for a typical household.

According to Ofgem, a typical household in Britain has 2.4 people living in it - who use 242 kWh of electricity and 1,000 kWh of gas a month.

But all households are different - and their energy usage will depend on how many people live there, what time of day they use the most energy, and how energy efficient their home is.

For example, the government estimates that if you live in a purpose-built flat your average bill will be £1,750.

If you live in a mid-terraced house it will be around £2,350.

Those who live in semi-detached houses will pay around £2,650 a year.

And detached properties will pay roughly £3,300 annually.

What extra help is the government offering?

Before Liz Truss was appointed prime minister, former Chancellor Rishi Sunak announced all households would receive a £400 discount on their energy bills between October 2022 and March 2023.

From 1 October people will start to receive a £66 discount for October, another for November, and £67 for December, January, February and March.

Some energy companies are directly applying these to bills, while others will credit the amount to customers' bank accounts.

Eight million households in receipt of certain benefits will also get £650 to help with their bills.

Pensioners will receive £300 and some people on special disability benefits will get £150.

People on low incomes and pensioners on pension guarantee credit will get £140 off through the Warm Home Discount.

Vulnerable families can also apply for extra help via their local council and their Household Support Fund.

What about businesses?

The government's energy bill relief scheme for England, Scotland and Wales will mean help with firms' energy bills for six months from 1 October. A parallel scheme is operating in Northern Ireland.

Wholesale prices businesses pay for electricity will be capped at 21.1p per kWh for electricity and 7.5p per kWh for gas.

This will be applied automatically to companies using variable tariffs.

For those on fixed price contracts, the same discounts will be applied if the agreement started after 1 April 2022.

The savings will appear on bills in November and will be backdated to October.

A review will be published at the end of the year which will help identify "vulnerable" businesses that need support beyond March 2023.

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2022-09-30 10:51:06Z
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UK economy grows by 0.2% after predicted decline - Sky News

Britain's economy grew by 0.2% in the three months to June, reversing the initial estimate of a 0.1% contraction, official figures show.

The upward revision of the second quarter GDP by the Office for National Statistics implies the UK is not in recession, as predicted by the Bank of England earlier this month.

Quarter of NHS trusts offering food banks to staff - economy latest

A technical recession is when the economy sees two consecutive quarters of decline.

Grant Fitzner, the ONS chief economist, said: "These improved figures show the economy grew in the second quarter, revised up from a small fall.

"They also show that, while household savings fell back in the most recent quarter, households saved more than we previously estimated during and after the pandemic."

The ONS said the growth was driven by upwards improvements for the health and financial sectors.

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Although the figures show economic growth in the second quarter, it remains below its pre-coronavirus peak, contrary to earlier estimates it had bounced back and underlines the scale of the challenge facing Liz Truss, the prime minister.

The ONS revised down its estimate for Britain's recovery from the COVID-19 pandemic, reflecting a bigger hit to the
economy than first thought in 2020 when health lockdowns shut down businesses across the country.

It said: "The level of real GDP is now estimated to be 0.2% below where it was pre-coronavirus at quarter 4 2019, downwardly revised from previous estimates of 0.6% above."

The ONS said it now believed the UK economy shrank by 11% in the year coronavirus struck the country, a more severe
contraction than the previous estimate of a 9.8% hit.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures suggested the damage
inflicted to the economy's ability to grow by the pandemic and Brexit was even larger than previously thought.

"These revisions will compel the Office for Budget Responsibility to revise down further its estimates for future potential GDP," he said.

The latest data comes in the face of the chaos on the financial markets and fears of rocketing mortgage bills triggered by the government's tax cutting mini-budget.

The turmoil has put the country's big current account deficit into new focus.

The current account gap in the April-June period shrank to £33.8bn.

Economists had predicted a deficit of around £44bn.

The shortfall was smaller than a £43.9bn deficit in the first quarter, which was revised down from an earlier estimate in
part due to energy companies, buoyed by surging prices, making more profit abroad than initially thought.

The January-March deficit remained the biggest on record, the ONS said.

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2022-09-30 06:21:42Z
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Cost of living: Energy bills set to rise but help cushions blow - BBC

Energy prices will rise for millions of households on Saturday, but the increase has been cushioned by a government cap on the cost per unit.

It stepped in after an 80% increase in domestic gas and electricity bills was earmarked for the first half of winter.

A typical annual bill will go up from £1,971 to £2,500 but will be further mitigated by cost-of-living payments.

But prices will still be twice as high as last winter, and charities say that will leave many struggling.

The squeeze will be particularly acute for those on prepayment meters, who pay for energy as they use it, and so have largely been unable to smooth out increased bills over the year.

"The most vulnerable, including children, will be cold and hungry as energy prices spiral, despite government support," said Adam Scorer, from charity National Energy Action.

People paying by direct debit tend to build up credit during the warmer, lighter summer months which then funds some of their extra use during the winter.

'We are trying our best'

Jaqueline Jones in Urmston in Manchester says she and her husband Joe are already taking steps to cut down on their energy bills.

"We're only filling the kettle to the amount we need, watching how often we put the washing machine on - little things like that," she said.

They are also hanging washing indoors and finishing it off for 10 minutes in the dryer, as opposed to using the dryer more often.

They are on a standard variable tariff for their electricity and energy bills, but haven't received an updated bill recently to know whether the measures are making a big difference as of yet.

"Hopefully when the actual bill does come in it won't be too much," Jacqueline says, adding that she is now watching their smart metre every time they make a cup of tea.

"I watch the numbers every time I put the kettle on - oh my goodness how it whizzes around!"

But she says the situation overall is frightening for the couple who are retired and rent a Victorian property.

"We're both pensioners and we don't have a great pension other than the government one, so we have to make sure it's going to last out, along with the bit of savings we do have.

"We'll just have to see and play it by ear... but we are trying our best."

New price cap

Every household pays for the energy it uses. There is no absolute cap on the total cost.

Under the government's two-year price guarantee, the average unit price for dual fuel customers paying by direct debit on variable deals will be limited to 34p per kilowatt hour (kWh) for electricity and 10.3p per kWh for gas.

With standing charges added, it means a typical household - one that uses 12,000 kWh (kilowatt hours) of gas a year, and 2,900 kWh of electricity a year - will not pay more than £2,500 a year for energy from Saturday.

Without this intervention, that annual bill would have been £3,549 a year, rising from the current and soon-to-expire level of £1,971 a year. Those on prepayment meters pay slightly more.

The chancellor, Kwasi Kwarteng said that the government's "energy intervention" meant that people across the country were protected.

However, last winter, the price cap - governed by the energy regulator Ofgem - meant the same typical household paid £1,277 a year.

That doubling of a typical energy bill is why millions of households have cut back on their energy use, according to a survey by the consumer group Which?.

Its findings, which it shared with BBC News, suggested that 58% of those asked reported reducing their usage of lights and appliances around the home. More than four in 10 said they had reduced hot water consumption, including taking fewer and shorter showers.

Given the wider context of rising prices, the consumer group also said that 60% of those surveyed had bought cheaper food products than usual and 36% had planned meals more, for example by batch cooking.

Which? has launched a campaign calling on supermarkets, telecoms and energy businesses to offer more support to customers facing financial difficulty, such as ensuring cheaper social broadband tariffs and value-range food is equally accessible to shoppers across the country.

"While government intervention is necessary, we also believe businesses across essential services can and should do more to help," said Rocio Concha, its director of policy and advocacy.

Cost-of-living payments

The government's earlier package of cost-of-living payments is continuing.

The next stage begins from Saturday when everyone's energy bill will eventually be cut by £400. The discount will be applied over six months, with a reduction of £66 in October and November, and £67 every month between December and March 2023.

The discount will be made automatically by energy suppliers in England, Scotland and Wales, with plans for the equivalent to be paid in Northern Ireland.

There will be further payments later in the winter for people who receive benefits and are on low incomes, and pensioners.

The energy plans were in place ahead of last Friday's tax-cutting mini-budget which has been followed by days of turmoil on the markets.

The government has said its energy guarantee would cost £60bn for the first six months.

However, industry analysis suggests the total bill could be between £130bn and £150bn.

The cost will be met by an increase in government borrowing, but the likely cost of this has soared after financial markets reacted badly to the chancellor's plans to introduce tax cuts worth £45bn.

There are also fears that the upheaval might affect the housing market.

Hundreds of mortgage products have been pulled since Friday, and are likely to return at higher costs, amid fears the Bank of England will have to raise interest rates much more sharply than previously expected.

How is the rising cost of living affecting how you live your life? Share your experiences and questions by emailing haveyoursay@bbc.co.uk.

Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:

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If you are reading this page and can't see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at HaveYourSay@bbc.co.uk. Please include your name, age and location with any submission.

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2022-09-30 04:45:40Z
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FCA contacts banks following huge withdrawal of mortgage deals - Financial Times

The Financial Conduct Authority has contacted UK lenders following the withdrawal of more than 1,600 mortgage products over concerns that millions of borrowers face a sharp rise in interest payments when their existing deals expire.

The watchdog’s supervisors have held talks with most of the big providers over the past week after most high-street lenders pulled fixed-rate products as turmoil hit the markets in the wake of chancellor Kwasi Kwarteng’s controversial tax-cutting, according to people close to the situation.

More than 2mn borrowers with fixed-term products will need to remortgage between now and the end of 2024, according to Bank of England data.

One source said the FCA was asking banks what options borrowers would have when their fixed-rate terms end, as concerns mount over their ability to pay much higher rates in excess of 5 or 6 per cent. The watchdog is working more widely on how the cost of living crisis will affect households. The FCA declined to comment.

Banks and building societies had pulled hundreds of mortgage products for new borrowers in recent days as their business models came under pressure from gyrations in the gilts and swaps markets, which they use to price home loans.

Some 1,621 home loans have been withdrawn since Friday, according to data provider Moneyfacts with a record 935 home loans pulled overnight on Tuesday.

Mortgage providers had initially reacted positively to the Bank of England’s emergency bond-buying programme on Wednesday designed to stabilise the market, raising hopes of a quick return of fixed-rate deals.

But on Thursday, some lenders were delaying the launch of new fixed-rate mortgages over concerns they will be flooded with demand. Atom Bank and OneSavings Bank are among the lenders waiting until at least next week.

In contrast, Virgin Money is planning to come back to the market Friday with higher rate products after withdrawing a week ago, according to a person close the situation.

Andrew Montlake, of mortgage broker Coreco, said lenders were coming back with “significantly higher rates” that were at least one percentage point higher, at about 5.5 per cent. He said Nationwide, HSBC and Scottish Widows were pushing through “some big rate hikes.”

Mark Mullen, chief executive of Atom Bank, told the Financial Times: “The danger is how do you reopen the mortgage market? Now there’s going to be a big pent up dam of customers and a rush.

“We’re thinking about when can we get back safely without being swamped and how do we price effectively, it’s still very volatile. We had hoped to be back at the end of this week, now it definitely won’t be. We’ll look again next week.”

Andy Golding, chief executive of OneSavings Bank, said that the lender would be offering a range of new residential and buy to let deals next week, after pulling them earlier this week.

Golding said: “We pulled our current products yesterday and we’re putting new fixed rate products on the shelf on Tuesday, giving us a couple of days for markets to settle down, so we’ve got a clear steer on where swap rates are and the ability to price the products.”

All the major high street banks have withdrawn some or all new mortgages over the past week, with the exception of NatWest. NatWest said: “We haven’t withdrawn any products this week.”

Additional reporting by Siddharth Venkataramakrishnan

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2022-09-29 18:37:52Z
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Kamis, 29 September 2022

Porsche shares climb after €75bn listing to defy grim market - Financial Times

Porsche shares climbed on their debut in Frankfurt, as the German carmaker defied a global economic slowdown and febrile markets to pull off one of Europe’s largest initial public offerings.

The €75bn listing marks a rare bright spot for an IPO market hit by the end of the bull run in equities and an energy crisis in Europe.

Shares in Porsche, which is majority owned by Volkswagen, rose 2 per cent early in the day, but ended virtually flat at €82.70 in Frankfurt on Thursday, while the wider German market was 1 per cent lower.

The Stuttgart-based company sold the shares on Wednesday at €82.5, the top of the pricing range.

VW is listing a 12.5 per cent stake in Porsche, its most profitable brand, as it seeks to raise funds to help pay for its investment in electric vehicles. Some of the €9.4bn that VW raised from the stake sale will be paid out to its shareholders as a special dividend.

“The high level of demand demonstrates investors’ confidence in Porsche’s future,” said VW’s chief financial officer Arno Antlitz. “The proceeds from the IPO will give VW significantly more financial flexibility as part of its transformation toward electromobility and digitisation.”

The German group wants to spend the remains of the proceeds developing electric cars, a sector in which the business has vowed to become a world leader.

Former VW boss Herbert Diess set a company target of beating Tesla in electric sales by 2025, which requires the group to sell millions of battery models.

Diess was replaced this summer by Porsche chief executive Oliver Blume, who will lead the listed sports car maker as well as its German parent.

The Porsche Taycan, the electric sports car that has outsold Porsche's engine-powered flagship 911 car, was the brand's first foray into battery models.

A Taycan was among the Porsches lined up on display outside the Frankfurt Stock Exchange on Thursday, as well as a range of 911s from the brand’s history.

About 150 automotive executives, bankers and advisers gathered at the historic stock exchange building in Frankfurt to celebrate one of the few major listings since the start of the pandemic and the war in Ukraine.

Alastair Mankin, a vice-president at financial services group Cowen, said the lack of a strong rise, or “pop” in market jargon, may come as a disappointment, especially because “many investors failed to get any worthwhile allocation in the IPO”.

“Most saw the stock as having been priced for success so this early trading will come as somewhat of a disappointment,” he said.

A banker who worked on the IPO told the Financial Times that “it’s a really crappy day” for any IPO because of the gloom and doom on the markets, adding that he was relieved the stock was trading up regardless.

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2022-09-29 17:09:40Z
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UK stock markets tumble as cost of living crisis sees Next cut sales and profit guidance - Sky News

Shares in companies that depend on consumer spending have plunged after Next, the fashion to homewares retailer, cut its sales forecast for the second half of its financial year and annual profit guidance.

The company used the publication of its half-year results to the end of July to say that there were too many variables at play amid the cost of living crisis to have much confidence in determining consumer demand ahead.

Next, which is widely seen as the most consistent high street performer, reported that it had enjoyed a stronger than anticipated first half with full price sales up 12.4% on the same period last year.

Profit before tax of £401m was 16% higher.

Truss gives first interviews since pound dived - economy latest

But it revealed that sales suffered during August before some demand returned in the current month.

Next, which trades from about 500 stores and online, said it now expected full price sales in its second half to fall 1.5%.

It had previously guided an increase of 1%.

The full-year pre-tax profit forecast fell by £20m to £840m but it still represented a rise of 2% on 2020/21.

The company's shares fell by 10% in early deals while those of high street rivals and other consumer-facing stocks also suffered.

The FTSE 100 and FTSE 250 indexes were both down more than 2% at one stage while growing recession fears were also evident on the continent, with the German DAX and French CAC also significantly lower.

Those worst hit on the London Stock Exchange included housebuilders and personal investment platforms.

Next said it was hoping to "see benefits from recent government measures" - namely help for household energy bills - but admitted it was tough to have a clear picture of what lay ahead.

The economy is enduring challenges on many fronts, with sterling hitting record lows this week and government bonds under severe pressure after the mini-budget, prompting Bank of England intervention.

Both the pound - at $1.08 - and bond yields - the interest rates demanded to hold UK government debt - were relatively stable on Thursday morning as the PM defended the government's growth plan and the handling of it following the market backlash.

Sterling did fall back against the euro at lunchtime when German inflation data came in almost 1% higher than expected - at 10.9% - triggering higher interest rate expectations ahead of the next European Central Bank policy meeting.

Next's chief executive, Lord Simon Wolfson, told an analyst call of his currency concerns ahead.

"The devaluation of the pound looks set to prolong inflation, even once factory gate prices ease.

"It looks like we may be set to have two cost of living crises: this year, a supply side led squeeze, next year a currency led price hike as devaluation takes effect."

"There are so many variables at play - energy, freight, employment, tax, economic migration, exchange rates, etc - that today, more than ever, it is not possible to predict the future on the basis of the past," Next said.

"It is over 40 years since the UK last experienced an inflationary shock on the scale we are witnessing today; and the UK economy of the 1970s - with its reliance on highly subsidised and geographically concentrated heavy industry - was incomparably different to the economy of today.

"We have used our recent trade, along with some internal and external economic data, to build a picture of what we think is going on and how the company is likely to be affected over the coming months."

The company's results followed weak recent trading updates from rivals including Asos, Boohoo and Primark.

Charlie Huggins, head of equities at Wealth Club, said of the Next results: "The fact that many retailers are struggling shouldn't be a surprise."

"This is arguably the most difficult trading environment since the 2008/09 financial crisis. Inflation is at levels not seen for four decades.

"Sterling is in the doldrums, trading at its weakest level against the dollar since 1985. Add to this, the war in Ukraine and the spectre of further interest rate rises. It's not exactly conducive to consumers restocking their wardrobes.

"Perhaps the biggest issue for the whole sector is that while things look challenging right now, they look set to become even more so.

"This is due to the precipitous decline in sterling which will only exacerbate inflationary pressures.

"Next looks better positioned than most of its peers to weather the storm, and emerge stronger in light of its high margins, robust cash flows and strong balance sheet. But 2023 could be a very difficult year the way things are shaping up."

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2022-09-29 11:52:16Z
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Mortgage rates causing concern and anxiety in Northern Ireland - BBC

Uncertainty around the future of interest rates has forced many homeowners across Northern Ireland into making tough decisions.

Some economists have predicted the Bank of England will raise its base interest rate from the current 2.25% to 5.8% by next spring, which would cause mortgage repayments to jump significantly.

The unpredictability has caused Craig Mullan and his family a lot of anxiety.

"We're in a fixed deal at the minute, which actually doesn't end until December 2023," he said.

"We spoke to our broker and even though we're in that deal, we've decided to re-mortgage.

"The new rate we've been offered is 1.5% higher than what we have now."

Mortgage lenders pull deals due to interest rate rise fears

Craig lives in Newtownards, County Down, with his fiancee Danielle and their three children.

The family's mortgage payment will go up by £200 a month under the new deal and they will have to pay an exit fee on their current mortgage.

But Craig feels the move will give them a "bit of security" in the longer-term.

"If we left it to later it could be a rate 4% higher than we're paying now," he said.

'Don't like credit cards'

Craig said the changes mean they will have to divert savings into household expenditure.

"I work in the public service. My wages haven't gone up. We don't like putting things on credit cards. But Christmas is coming up and we're getting married in May 2024," he said.

"It is very worrying."

Claire Harper, from Coleraine in County Londonderry, faced a similar dilemma.

She has just re-mortgaged her family home and has seen the cost jump by £140 a month.

"We bought in January 2021 so our two-year fixed (rate) was coming to an end at the end of the year," she said.

"We decided to try and get a deal early and I feel lucky now.

"If we'd left it until this week it could have been another £100-£150 a month."

'Get a good broker'

The mother-of-two said she would have to cut back on some luxuries in light of the extra mortgage cost.

"Thankfully, we're both working full-time. We do have childcare to pay and that is a big concern. But we were fortunate that we could re-mortgage in advance of this," she said.

"There's nothing you can do now, but hope for change."

Sally Mitchell, a mortgage adviser and broker known as the Mortgage Mum, told the BBC about 300,000 people in the UK come to the end of their fixed-rate mortgage every three months, but there was a "lot of help out there" for those looking at costs increasing.

"It's really important to remember that everyone has an individual set of circumstances, and what works for you might not work for your neighbour or your co-worker," she said.

"Try to find a good broker and get some advice on what might work for you."

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2022-09-29 06:04:17Z
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