Motorists count cost as petrol prices hit eight-year high fuelled by oil demand
Millions of motorists are being hit in the pocket as petrol prices reach an eight year high after nine successive months of hikes, latest RAC figures show.
And the cost at the pump is only set to rise further, warns the motoring organisation, with demand for oil outstripping supply amid the continuing global recovery from the coronavirus pandemic.
The rise in prices, which saw 3.4p and 2.7p added to a litre of petrol and diesel respectively in July, will also fuel the cost of staycations, which have seen a spike amid uncertainty over overseas travel restrictions.
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Fuel increases will also add to the cost of staycations this year
According to the RAC, last month saw the largest increase in the price of unleaded since January.
It means on average a litre now costs 135.13p – a level not seen since late September 2013 – up from 131.76p at the start of July.
Diesel now costs on average 137.06p per litre, up from 134.36p.
The price rises meant that last month was the most expensive July to fill up with petrol since 2013, and for diesel since 2014.
A driver filling up a 55-litre car with petrol now pays on average £3.08 more to fill up than they did at the start of June, and £11.47 more than they did a year ago.
For diesel drivers, filling a similarly sized tank now costs £2.90 more than at the start of June, and £10.46 more than it did at the end of July 2020.
As countries move to rally rom the economic turmoil caused by the COVID-19 crisis, demand for oil is increasing, pushing up wholesale fuel prices which are passed into drivers.
The RAC advises motorists to visit supermarkets to find the best value fuel this summer, with the price of a litre of petrol around 3p cheaper compared to the average and more than 16p less than at motorway service areas.
RAC fuel spokesman Simon Williams said: “Prices really are only going one way at the moment – and that’s not the way drivers want to see them going.
“With a second summer staycation in full swing, it’s proving to be a particularly costly one for many families who are using their cars to holiday here in the UK.
“With so many people depending on their vehicles, there’s really nothing drivers can do to escape the high prices, and our best advice is for them to drive as economically as possible in order to try to make their money go further.
“Right now it’s hard to see what it will take for prices to start falling again.
“While we’re not past the pandemic by any means, demand for oil is likely to continue to increase as economic activity picks up again, and this is likely to have the effect of pushing up wholesale fuel prices, costs which retailers are bound to pass on at the pumps.
“Unless major oil producing nations decide a new strategy to increase output, we could very well see forecourt prices going even higher towards the end of the summer.
“If there is any good news at all, it is that prices would need to rise significantly further – by a further 3p – to reach the highest prices we saw in 2013.
“But that’s no comfort for the millions of drivers who are faced with paying so much more for fuel than they have done in many years.”
Business
UBS takeover of Credit Suisse: Embattled bank’s chairman describes ‘historic, sad and very challenging’ day
UBS will take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence.
Credit Suisse, the 167-year-old embattled lender had been brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.
The credit line was agreed upon in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.
That takeover was announced on Sunday evening – UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.
The deal is expected to be closed by the end of this year.
Colm Kelleher, chairman of UBS Group, said the agreement “represents enormous opportunities”.
He also said that his bank’s long-term aim would be to downsize Credit Suisse’s investment banking business and align it with the “conservative risk culture” of UBS.
Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging” for his bank and the global market.
‘The best available outcome’
Mr Lehmann said: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.
“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”
‘Exceptional situation’
In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.
It is also hoped that UBS’s takeover of its old rival will avoid the contagion of the kind seen in the financial crisis of 2008.
Central banks insist systems are resilient
The news was welcomed by central banks in the US, Europe and in the UK.
All three insisted that banking systems within their jurisdiction are strong and resilient.
The Bank of England said: “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.
“The UK banking system is well capitalised and funded, and remains safe and sound.”
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Credit Suisse rescue: What now for the UK’s banks?
A deal likely to ripple through global markets
Credit Suisse is one of the world’s largest wealth managers and is also one of 30 banks ranked as systemically important, meaning the deal is likely to ripple through global markets on Monday.
It is also one of the largest investment banking employers in the City of London, employing around 5,000 people.
In a memo to employees on Sunday, Credit Suisse said there would be no immediate impact on clients or day-to-day working operations, adding that branches and global offices would remain open.
It comes after a difficult few weeks for the banking sector, with the collapse of US lenders Silicon Valley Bank and Signature Bank.
The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.
UBS will take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence.
Credit Suisse, the 167-year-old embattled lender had been brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.
The credit line was agreed in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.
That takeover was announced on Sunday evening – UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.
The deal is expected to be closed by the end of this year.
Colm Kelleher, chairman of UBS Group, said the agreement “represents enormous opportunities”.
He also said that his bank’s long-term aim would be to downsize Credit Suisse’s investment banking business and align it with the “conservative risk culture” of UBS.
Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging” for his bank and the global market.
‘The best available outcome’
Mr Lehmann said: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.
“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”
‘Exceptional situation’
In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.
It is also hoped that UBS’s takeover of its old rival will avoid the contagion of the kind seen in the financial crisis of 2008.
Central banks insist systems are resilient
The news was welcomed by central banks in the US, Europe and in the UK.
All three insisted that banking systems within their jurisdiction are strong and resilient.
The Bank of England said: “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.
“The UK banking system is well capitalised and funded, and remains safe and sound.”
Please use Chrome browser for a more accessible video player
Credit Suisse rescue: What now for the UK’s banks?
A deal likely to ripple through global markets
Credit Suisse is one of the world’s largest wealth managers and is also one of 30 banks ranked as systemically important, meaning the deal is likely to ripple through global markets on Monday.
It is also one of the largest investment banking employers in the City of London, employing around 5,000 people.
In a memo to employees on Sunday, Credit Suisse said there would be no immediate impact on clients or day-to-day working operations, adding that branches and global offices would remain open.
It comes after a difficult few weeks for the banking sector, with the collapse of US lenders Silicon Valley Bank and Signature Bank.
The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.
Business
John Lewis may end 100% staff ownership to raise investment for ‘transformation’ as job losses loom
The retail giant John Lewis may dilute its 100% employee ownership to raise fresh investment.
The change to the partnership model would signal a major departure for the company, which runs the department store chain and Waitrose supermarkets.
The firm warned of job cuts and told staff it will not hand out a bonus for only the second time since 1953 this week after posting an annual loss of £234m as costs soared and sales dipped.
Dame Sharon White, its chairwoman, is in the early stages of exploring a plan to change its mutual structure in an attempt to raise up to £2bn of new investment, according to The Sunday Times.
The group would consider selling only a minority stake and its priority would be to maintain majority employee ownership, the newspaper said.
Any move would have to be voted on by the retailer’s partnership council of about 60 staff.
In the face of tough trading conditions, the firm has been looking to diversify its operations, including a move into the “build to rent” property business.
At the end of last year it signed a £500m deal with Abrdn, a global investment company, that will help it build 1,000 new homes.
The John Lewis Partnership said: “We’ve always said we would seek partnerships to help fund our transformation and exciting growth plans.
“We’ve done this with Ocado in the past and now with Abrdn.
“Our partners, who own the business, will be the first to hear about any developments.”
The business includes 329 Waitrose shops
UK’s largest employee-owned business
The business was founded by John Lewis with a small shop on Oxford Street in 1864.
His son, John Spedan Lewis, created the partnership more than 70 years ago as an experiment into a better way of doing business by including staff in decision-making.
The John Lewis Partnership is the UK’s biggest employee-owned business with around 74,000 staff, known as partners.
The group has 34 John Lewis shops and 329 Waitrose shops, along with its retail websites.
In a letter sent to staff last week, Dame Sharon raised the spectre of job losses as part of efforts “to become more efficient and productive”.
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‘Inflationary pressures’
A loss of £78m was recorded for the financial year which ended in January but when exceptional costs were added this reached £234m.
These included the write-down in value of Waitrose stores.
It represented a slump from a £181m profit in the previous year, with John Lewis blaming “inflationary pressures”.
The update came a day after the group appointed turnaround specialist Nish Kankiwala as its first chief executive, in a shake-up of the leadership structure.
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