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The energy regulator will conduct a consultation on how it caps bills, as many suppliers continue to struggle with increasing gas prices.

Thirteen energy suppliers have gone bust since the beginning of September, beaten by soaring wholesale energy costs and unable to pass costs to customers due to the restrictions of the price caps.

According to analysts cited by news agency Reuters, the difference between wholesale prices and what suppliers can charge is currently around £400 per customer per year.

In a letter to suppliers, Ofgem said: “The unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain.

“We have been working with the government, the energy industry, and consumer bodies to manage the situation, protecting consumers during this challenging time.

“As this period of uncertainty continues, and the pressure on the sector grows, we are taking steps to protect the short- and long-term interests of consumers, providing greater certainty for investors and strengthening the resilience of the sector.”

The consultation will be launched in November and a decision on any changes will be published in February, when the next price cap will be announced but in time for any changes to be implemented before it comes into effect in April.

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Some of the energy market’s big players welcomed the measures but more of their frustration appeared to be directed at smaller suppliers, rather than the price cap.

Michael Lewis, chief executive at E.ON, said: “We’ve got to take a cold, hard look at the energy market to understand what went wrong and to make sure we can stop this happening again.

“Customers are already facing steep rises in bills because of the sudden jump in wholesale energy costs, made worse by the added costs from the failure of more than a dozen energy companies.

“Today’s update from Ofgem is a welcome step in the right direction and I applaud the speed of their response.

“This is a positive move towards making sure only responsible companies can play a part in our energy future and in insulating customers from picking up the tab of bad businesses.”

A spokesperson for British Gas parent company Centrica said: “Protecting consumers from irresponsible supplier practices is essential and therefore we welcome Ofgem’s letter, which we will review in detail.

“Ultimately lessons must be learnt to ensure what we’re currently seeing in the retail energy market never happens again.

“It is very clear that increased regulation is needed, similar to that of the banking and financial services sectors. We must ensure that companies who make a promise to their customers can actually deliver on that commitment.”

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Harrods plots legal action against estate of former owner al-Fayed

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Harrods plots legal action against estate of former owner al-Fayed

Harrods is preparing to take legal action against the estate of its former owner, Mohamed al-Fayed, as the multimillion-pound legal bill for compensating his sexual abuse victims continues to escalate.

Sky News has learnt that the Knightsbridge department store, which has been owned by a Qatari sovereign wealth fund since 2010, plans to file a so-called passing-over application in the High Court as early as next week.

The intention of the application is to secure the removal of Mr al-Fayed‘s estate’s current executors, and replace them with professional executors to administer it instead.

Professional executors would be expected to investigate the assets and liabilities of the estate, while Harrods insiders claimed that the current executors – thought to be close family members of the deceased billionaire – had “ignored” correspondence from its lawyers.

Sources close to Harrods said the passing-over application paved the way for it to potentially seek to recover substantial sums from the estate of the Egyptian tycoon as it contends with a compensation bill likely to run to tens of millions of pounds.

In a statement issued to Sky News on Saturday, a Harrods spokesperson said: “We are considering legal options that would ensure that no doors are closed on any future action and that a route to compensation and accountability from the Fayed estate remains open to all.”

Mr al-Fayed is believed to have raped or sexually abused hundreds of women during his 25-year tenure as the owner of Harrods.

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He died in 2023, since when a torrent of details of his abuse have been made public by many of his victims.

Earlier this year, Sky News revealed details of the compensation scheme designed by Harrods to award six-figure sums to women he abused.

In a form outlining the details of the Harrods redress scheme overseen by MPL Legal, which is advising the department store, it referred to the potential “for Harrods to recover compensation paid out under this Scheme from Mohamed Fayed’s estate”.

“You are not obliged to assist with any such claim for recovery,” the form told potential claimants.

“However, if you would be willing to assist Harrods including potentially by giving evidence against Fayed’s estate, please indicate below.”

This weekend, there appeared to be confusion about the legal representation of Mr al-Fayed’s estate.

In March, the BBC reported that Fladgate, a UK-based law firm, was representing it in an article which said that women who worked for him as nannies and private air stewards were preparing to file legal claims against the estate.

This weekend, however, a spokesman for Fladgate declined to comment on whether it was acting for Mr al-Fayed’s estate, citing confidentiality restrictions.

A source close to the law firm, meanwhile, insisted that it was not acting for the estate.

KP Law, another law firm acting for some al-Fayed abuse survivors, has criticised the Harrods-orchestrated process, but has itself faced questions over proposals to take up to 25% of compensation awards in exchange for handling their cases.

Harrods insiders said there was a growing risk that Mr al-Fayed’s estate would not be responsibly administered given that the second anniversary of his death was now approaching.

They added that as well as Harrods itself seeking contribution for compensation paid out for Mr al-Fayed’s abuse, its legal action would also potentially open way for survivors to claim directly against the estate.

Victims with no direct connection to Harrods are not eligible for any compensation through the store’s own redress scheme.

Even if Harrods’ passing-over application was approved by the High Court, any financial recovery for the department store would be subject to a number of additional legal steps, sources said.

“The passing-over action would achieve the goals of acknowledgement and accountability from the estate for survivors who don’t have the resource to undertake a passing-over application themselves,” an insider said this weekend.

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High street lender Metro Bank receives takeover approach

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High street lender Metro Bank receives takeover approach

The high street lender Metro Bank has been approached about a private equity-backed takeover in a move that could lead to the disappearance of another company from the London Stock Exchange.

Sky News has learnt that Metro Bank was approached in the last fortnight about an offer to take it private spearheaded by the financial services-focused buyout firm Pollen Street Capital.

Pollen Street is one of the major shareholders in Shawbrook, the mid-sized bank which in the past has approached Metro Bank about a merger of the two companies.

In recent months, Shawbrook’s owners have stepped up efforts to identify a prospective corporate combination, holding tentative talks with Starling Bank about a £5bn tie-up, while also drawing up plans for a stock market listing.

The takeover approach to Metro Bank comes as it puts a traumatic period in which it came close to insolvency firmly behind it.

In November 2023, the lender was rescued through a £925m deal comprising £325m of equity – a third of which was contributed by Jaime Gilinski Bacal, a Colombian billionaire – and £600m of new debt.

Mr Gilinski now holds a near-53% stake through his investment vehicle, Spaldy Investments, and sits on the company’s board.

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Since the bailout deal, Metro Bank has cut hundreds of jobs and sold portfolios of loan assets, at the same time as chief executive Daniel Frumkin has improved its operating performance.

Shares in Metro Bank have more than trebled in the last year as its recovery has gathered pace.

On Friday, the stock closed at 112.2p, giving it a market capitalisation of just over £750m.

At one point in 2018, the lender – which promised to revolutionise retail banking when it opened its first branch in London in 2010 – had a market capitalisation of £3.5bn.

Metro Bank became the first new lender to open on Britain’s high streets in over 100 years when it launched in the wake of the 2008 financial crisis.

Its branch-based model, which included gimmicks such as offering dog biscuits, proved costly, however, at a time when many rivals have been shifting to digital banking.

Reporting first-quarter results last month, Mr Frumkin said: “During the first quarter of 2025, we have continued to deliver the strategic repositioning of Metro Bank’s business, maintaining strong cost control while driving higher net interest margin by changing the mix of assets and remaining disciplined about deposits.”

“We have seen further growth in our corporate and commercial lending, with Metro Bank’s relationship banking and breadth of services creating differentiation for us in the market.”

Metro Bank operates from about 75 branches across the country, and saw roughly 30,000 new personal and business current accounts opened during the last quarter.

In 2019, customers formed sizeable queues at some of its branches after suggestions circulated on social media that it was in financial distress.

Days later, it unveiled a £350m share placing in a move designed to allay such concerns.

The company has had a chequered history with City regulators, despite its relatively brief existence.

In 2022, it was fined £10m by the Financial Conduct Authority for publishing incorrect information to investors, while the PRA slapped it with a £5.4m penalty for similar infringements a year earlier.

The lender was founded in 2009 by Anthony Thompson, a financial services entrepreneur, and Vernon Hill, an American who eventually left in controversial circumstances in 2019.

Last month, it sailed through a shareholder vote unscathed after drawing opposition to a proposal which could see top executives paid up to £60m apiece.

Metro Bank and Pollen Street both declined to comment on Saturday

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Rachel Reeves ‘a gnat’s whisker’ from having to raise taxes, says IFS

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Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS

Rachel Reeves is a “gnat’s whisker” away from having to raise taxes in the autumn budget, a leading economist has warned – despite the chancellor insisting her plans are “fully funded”.

Paul Johnson, director of the Institute for Fiscal Studies (IFS), said “any move in the wrong direction” for the economy before the next fiscal event would “almost certainly spark more tax rises”.

‘Sting in the tail’ in chancellor’s plans – politics latest

Speaking the morning after she delivered her spending review, which sets government budgets until 2029, Ms Reeves told Wilfred Frost hiking taxes wasn’t inevitable.

“Everything I set out yesterday was fully costed and fully funded,” she told Sky News Breakfast.

Her plans – which include £29bn for day-to-day NHS spending, £39bn for affordable and social housing, and boosts for defence and transport – are based on what she set out in October’s budget.

That budget, her first as chancellor, included controversial tax hikes on employers and increased borrowing to help public services.

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Spending review explained

Chancellor won’t rule out tax rises

The Labour government has long vowed not to raise taxes on “working people” – specifically income tax, national insurance for employees, and VAT.

Ms Reeves refused to completely rule out tax rises in her next budget, saying the world is “very uncertain”.

The Conservatives have claimed she will almost certainly have to put taxes up, with shadow chancellor Mel Stride accusing her of mismanaging the economy.

Taxes on businesses had “destroyed growth” and increased spending had been “inflationary”, he told Sky News.

New official figures showed the economy contracted in April by 0.3% – more than expected. It coincided with Donald Trump imposing tariffs across the world.

Ms Reeves admitted the figures were “disappointing” but pointed to more positive figures from previous months.

Read more:
Chancellor running out of levers to pull
Growth stats make for unpleasant reading
Your spending review questions answered

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Tories accuse Reeves over economy

‘Sting in the tail’

She is hoping Labour’s plans will provide more jobs and boost growth, with major infrastructure projects “spread” across the country – from the Sizewell C nuclear plant in Suffolk, to a rail line connecting Liverpool and Manchester.

But the IFS said further contractions in the economy, and poor forecasts from the Office for Budget Responsibility, would likely require the chancellor to increase the national tax take once again.

It said her spending review already accounted for a 5% rise in council tax to help local authorities, labelling it a “sting in the tail” after she told Sky’s Beth Rigby that it wouldn’t have to go up.

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