US growth slowed sharply in first quarter as Fed pushed rates higher - Financial Times

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2023-04-27 12:33:09Z
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Households still face £2,500 heat pump bill even after using voucher scheme, minister admits - The Telegraph

Heat pumps will still cost households thousands of pounds each even after they have used the Government’s troubled voucher scheme, a minister has admitted.

Lord Callanan, a junior energy minister, said some consumers would pay “as little” as £2,500 for the eco-friendly heating systems after a grant of £5,000 was taken into account.

His admission comes after critics blamed the high cost of heat pumps for the “embarrassingly” low uptake of the £150m-a-year boiler upgrade scheme.

Official figures show that fewer than 10,000 households have taken advantage of the grants since its launch last May.

Would you install a heat pump in your home? Poll

A typical household will end up paying between £7,000 and £13,000 to install an air source heat pump before any voucher discount is applied, according to the Energy Saving Trust.

In a letter to peers, Lord Callahan said the Government will review the maximum grant level and could still increase it, leaving the door open to even more support being offered.

He said the current rate of support – a £5,000 voucher for an air source heat pump, or £6,000 for a ground source one – was decided based on consumer research and data from previous government grant schemes.

However, the figure is lower than the £9,000 handed out on average to households buying air source heat pumps under the domestic renewable heat incentive (RHI), which was scrapped last year.

This represented better value for money for taxpayers, he claimed, and has sped up the rollout of heat pumps. 840 a month are being installed under the boiler upgrade scheme, rising from 590 a month under the RHI.

The minister added: “The current grant levels mean that some consumers will pay as little as £2,500 when installing an air source heat pump, once the grant has been taken into account.

“Moving forward this could be even less where households are able to access additional incentives through mortgage lenders.

“We continue to keep the evidence for the grant levels under review… to ensure these are appropriate to incentivise consumer demand but also represent value for money.”

Lord Callanan was responding to a letter from the House of Lords environment committee, which said the boiler upgrade scheme is well-meant but “seriously failing” to meet its aims.

The National Infrastructure Commission has warned that on present trends, the government will miss a 2028 target for installing 600,000 heat pumps per year by a wide margin.

Heatpump installtions across Europe

Ministers have extended a marketing campaign to raise awareness about the government vouchers in an effort to boost take up.

Baroness Parminter, chairman of the Lords committee, said: “The commitment to enhance the current marketing campaign is welcome, but it remains unclear as to its scale and whether it will be sufficient to address the woeful lack of awareness of the scheme and why we need to switch to this mature net zero home heating technology.”

A mass uptake of electric heat pumps to replace the gas-powered boilers found in most homes today is a key plank of the UK’s plan to reach “net zero” carbon emissions by 2050.

The boiler upgrade scheme was meant to jump-start that process by stimulating demand, which would help manufacturers to scale up production and drive down costs.

However, the low uptake has left both those goals in doubt. Only one third of a possible 30,000 vouchers were claimed in the scheme’s first year.

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2023-04-26 11:46:00Z
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Heathrow remains loss-making despite rise in passenger numbers - The Guardian

Heathrow airport has said it is still loss-making, even as it continues to be Europe’s busiest airport, welcoming almost 17 million passengers in the first three months of the year.

The airport also said that passengers would be able to “travel as normal” during the peak getaway period around the coronation of King Charles III, taking place on 6 May, despite a fresh planned strike by security staff.

Releasing its financial results for the first three months of the year, the airport said it had not yet returned to profit after the coronavirus pandemic, and reported an adjusted pre-tax loss of £139m for the first quarter. It is not forecasting paying any shareholder dividends in 2023.

Heathrow is blaming the regulator for the level at which it has set its annual price cap for the amount it can charge airlines for using the airport for preventing it from increasing its earnings.

The Civil Aviation Authority (CAA) is responsible for setting the amount Heathrow can charge each airline customer. The current level for 2023 means the average maximum per-passenger fee remains at £31.57 this year. It will, however, drop to £25.43 in 2024, and stay broadly flat until the end of 2026.

Heathrow called this cap “too low” and said it had appealed against the CAA’s settlement to the competition watchdog, the Competition and Markets Authority.

The CAA has previously said its decision could contribute to lower fares for passengers in the coming years.

About 1,400 security officers at Heathrow, who are members of the Unite union, plan to strike for a further eight days in May in a dispute over pay, after industrial action taken over Easter.

Unite has previously said the strike would cause “inevitable disruption and delays” at a time when people were expected to travel to the UK.

Heathrow said it did not believe the strike action would have an impact on passengers travelling through the airport and said customers would be able to get away as normal around the coronation and during the May half-term holidays.

The airport said it had enjoyed a “strong performance” during the previous school half-term and the Easter holidays.

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As passengers return to air travel after the pandemic, Heathrow said it was offering more flights to certain destinations including Chinese cities, after the country reopened its borders after Covid.

The airport’s chief executive, John Holland-Kaye, said the year had “got off to a strong start”. However, he is calling on the government to make the UK more attractive for overseas visitors compared with the EU by reversing the decision to remove tax-free shopping for tourists, which he called the “tourist tax”.

“We are building our route network to connect all of Britain to the growing markets of the world – now we need the government to lure international visitors back to the UK by scrapping the tourist tax,” Holland-Kaye said.

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2023-04-26 08:58:00Z
1985002634

Bank of England economist says people need to accept they are poorer - BBC

Getty Images

By Michael Race & Vishala Sri-Pathma

Business reporters, BBC News

The Bank of England's top economist has said people in the UK need to accept that they are poorer otherwise prices will continue to rise.

Huw Pill told a podcast in the US that there was a "reluctance to accept that, yes, we're all worse off".

He said in response to higher bills and other costs rising, workers had responded by asking for wage increases and businesses were charging more.

UK inflation, the rate at which prices rise, was 10.1% in the year to March.

The rate dipped last month from 10.4% but that does not mean prices are falling. It means they are rising at a slightly slower pace.

Inflation in the UK has been higher than the Bank of England's target of 2% for some time.

Part of the Bank's job is to keep inflation at its target rate. In response to rising prices it has increased interest rates, which makes the cost of borrowing money more expensive.

This move, in theory, is supposed to make people reduce spending, so that demand for goods cools down and price rises slow down.

With households being hit by soaring energy bills and food costs, many workers have been asking for pay rises to help ease the pressure on budgets.

Job vacancies have been falling, but are still higher than they have been for decades, strengthening people's hands as they ask for pay rises.

Although pay has been going up, it has not matched inflation, meaning people are worse off.

'Someone needs to accept they're worse off'

Mr Pill said people demanding pay increases and businesses putting prices up added to inflation and caused prices to rise even further across the economy.

"Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether through higher wages or passing energy costs on to customers etc," he told the Beyond Unprecedented podcast from Columbia Law School.

"What we're facing now is that reluctance to accept that, yes, we're all worse off and we all have to take our share; to try and pass that cost onto one of our compatriots and saying: 'We'll be alright, but they will have to take our share too'.

"That pass-the-parcel game that's going on here, that game is one that's generating inflation, and that part of inflation can persist."

Thomas Moore, senior investment director at Abrdn, told the BBC Mr Pill was pointing to one-off factors driving up inflation and saying "don't blame us, look at these one-offs and actually we need you to help us to get [inflation] down to 2% because the sooner that all of you expect lower inflation in terms of your wages demands and the settlements you achieve with your employers that will help bring inflation down".

However, Mr Moore said there had been a "massive expansion" in the money supply under the Bank of England as a result of the Covid pandemic. "The problem is monetarist economists believe that money supply is the key root of inflation, so there's this debate raging at the moment - was it those one-off transitory factors [that caused inflation] or was it actually a cause of this underlying issue of money supply?"

Mr Pill is not the first Bank of England official to warn about wage rises contributing to inflation.

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Last year, the Bank's governor Andrew Bailey urged people not to ask for big pay rises, to try and stop prices rising out of control.

His comments were immediately met with backlash, with unions saying they were "ill-founded". At the time, Downing Street and the Treasury distanced themselves from Mr Bailey's comments.

Mr Bailey later urged moderation in price rises from businesses.

Abrdn's Mr Moore said it was the Bank's aim to persuade people to rein in their wage demands. "The bit of inflation that they're particularly worried about is what's called core inflation and the main driver of core inflation is wages, so it's a really tough bitter pill. I don't know how people are going to swallow this bitter pill because it's a very tough message."

Inflation was expected to fall below 10% last month but soaring food prices meant it fell by less than expected.

The British Retail Consortium said it expected food prices to start falling "over the next few months".

But the retail industry body said there was a three to nine-month lag to see price falls reflected in shops.

Related Topics

• Inflation
• UK economy
• Bank of England
• Pay
• Andrew Bailey

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2023-04-26 06:44:01Z
1982139673

Energy suppliers hoarding £400 credit from millions of bill payers - The Telegraph

Energy companies have been accused of hoarding customers' cash after research showed suppliers are sitting on more than £400 credit per household.

Providers owe a combined £6.7bn to 16 million households, a report by price comparison website Uswitch found. Experts said many suppliers had increased direct debits and as a result credit balances had soared by £5.3bn. The number of households overpaying their energy bill has risen by five million year-on-year.

Uswitch found that Plymouth had the highest energy credit among UK cities, with the average household owed £603. This was followed by Brighton on £464 and Sheffield with average credit of £441. The average amount owed was £411.

As payments to suppliers have increased, the number of households in debt has fallen from six million to four million. The total amount of debt owed also dropped from £1.2bn to £920m.

Richard Neudegg of Uswitch said: “Normally we’d expect to see people exit winter with little or no credit balances, but a substantial number of households have weathered the storm, leaving suppliers sitting on nearly £7bn.”

The findings raised questions over whether direct debits set by suppliers in reaction to the energy price rises were “much higher than they needed to be”, Mr Neudegg said.

Cities where customers are most in credit

An investigation by The Telegraph carried out last year found that suppliers were increasing direct debits even when the household was significantly in credit.

Ofgem has been looking into ways to better protect customers’ credit balances since 2018, however, it has dropped proposals to automatically refund credit at the end of the contract year and to limit the amount of credit companies can hold.

It also shelved plans to ringfence customers’ credit balances to stop them from being used like an “interest-free company credit card”.

Uswitch is urging consumers to check their credit balance and consider asking for a refund after discovering that half of households (54pc) do not know how to reclaim credit from their provider.

How can I claim my money back?

Bill payers should check their account balance online or over the phone to work out if they are in credit, experts said.

A supplier may automatically refund any money owed at the end of the year, or reduce a customer’s future direct debit payments.

But if they do not, then customers should consider claiming back the credit. To do this, they will need to contact their supplier and say how much credit they would like refunded.

Customers will generally be asked to give an up-to-date meter reading.

They may not refund customers who only have a small amount of credit during the summer, as these customers are likely to use up the credit when bills are higher during the autumn and winter. If suppliers turn down a refund, they must give a reason for doing so.

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2023-04-26 05:00:00Z
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Live news: Heathrow blames quarterly loss on 'low' UK fees even as passengers return - Financial Times

What is included in my trial?

During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.

Standard Digital includes access to a wealth of global news, analysis and expert opinion. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. For a full comparison of Standard and Premium Digital, click here.

Change the plan you will roll onto at any time during your trial by visiting the “Settings & Account” section.

What happens at the end of my trial?

If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 € per month.

For cost savings, you can change your plan at any time online in the “Settings & Account” section. If you’d like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial.

You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many user’s needs. Compare Standard and Premium Digital here.

Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel.

When can I cancel?

You may change or cancel your subscription or trial at any time online. Simply log into Settings & Account and select "Cancel" on the right-hand side.

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2023-04-26 07:23:48Z
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First Republic shares plunge as it reveals $100bn deposit flight - Financial Times

What is included in my trial?

During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages.

Standard Digital includes access to a wealth of global news, analysis and expert opinion. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. For a full comparison of Standard and Premium Digital, click here.

Change the plan you will roll onto at any time during your trial by visiting the “Settings & Account” section.

What happens at the end of my trial?

If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 € per month.

For cost savings, you can change your plan at any time online in the “Settings & Account” section. If you’d like to retain your premium access and save 20%, you can opt to pay annually at the end of the trial.

You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many user’s needs. Compare Standard and Premium Digital here.

Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel.

When can I cancel?

You may change or cancel your subscription or trial at any time online. Simply log into Settings & Account and select "Cancel" on the right-hand side.

You can still enjoy your subscription until the end of your current billing period.

What forms of payment can I use?

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2023-04-25 16:06:35Z
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