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There is a mounting risk that fuel prices could soon begin to rise again as major oil-producing countries ponder a big cut in output.

The Opec+ cartel, which includes Saudi Arabia and Russia among its main members, is expected by markets to reveal this week a collective target to reduce delivery by more than one million barrels per day.

The price of Brent Crude, which rose 4% on Monday in anticipation of such a cut, was up further during Tuesday’s trading – to just over $90 per barrel.

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Opec+ is responding to weaker demand for oil globally as economies tackle high inflation though there is pressure from the West to maintain supply to help tame the pace of price rises.

While the current Brent price remains far below the early Russia-Ukraine war highs of above $120 per barrel, the recent weakness of the pound would be expected to contribute to pressure on UK pump prices, potentially adding to the cost of living crisis again according to motoring organisation the RAC.

That is because wholesale fuel, like oil, is traded in dollars.

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‘Further pain at UK pumps’

RAC fuel spokesman Simon Williams told Sky News: “The extent of the (Opec+) cuts will be crucial, as will compliance from member countries throughout October.

“But one thing’s for sure, it’s likely to cause further pain for drivers at the pumps in the UK, particularly with the pound so weak against the dollar.

“If the cost of a barrel were to climb back up to $100, drivers at the current exchange rate would very soon see forecourts displaying prices around 175p a litre again, which is 12p more than the current UK average.”

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How rising costs will affect you

Average pump prices are currently 163p for unleaded and 180p for diesel – the latter remaining higher because of the loss of Russian supplies.

The pound was infinitely higher in value versus the US currency, around the $1.25 level, when petrol and diesel costs were hitting record levels daily in the spring following the Russian invasion.

It slumped to an all-time low of $1.03 last week in the wake of the government’s mini-budget when financial markets balked at the volume of giveaways and level of borrowing required to fund the growth programme.

How the markets are performing

It had recovered to $1.14 by Tuesday morning in choppy trading. That has been credited to government U-turns since Kwasi Kwarteng’s statement to the Commons and a weakening in the historic level of dollar strength.

The reason cited for the weakening was data suggesting the US economy was slowing faster than expected, raising the prospect of a pause to sharp US interest rate hikes.

Stock markets also recovered some poise as investors left the safety of the dollar, with the FTSE 100 putting on 2%.

The more domestically-focused FTSE 250 was 2.6% higher.

Energy and commodity stocks were among those to enjoy the best gains as prices recovered from their recent recession -induced slump.

Opec sources told the Reuters news agency that voluntary output cuts by individual members could come on top of the group production reductions.

That being the case, it would amount to the largest output reduction since the start of the COVID pandemic in early 2020.

However, there were signs that the markets were yet to fully shrug off the fallout from the mini-budget that saw UK borrowing costs soar.

There were clear concerns around the UK’s credibility when the government raised £2.5bn on the bond markets.

The 0.5% of the 2061 (40-year) gilt on offer was sold at an average yield of 3.371%.

While that was the highest yield for any gilt sold at auction since 2014, it came in below that for a 30-year green bond syndicated last week.

It drew bids worth 1.97 times the volume on offer – the lowest bid-to-cover ratio since March.

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Post Office scandal: Victims say government’s control of redress schemes should be taken away

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Post Office scandal: Victims say government's control of redress schemes should be taken away

Post Office scandal victims are calling for redress schemes to be taken away from the government completely, ahead of the public inquiry publishing its first findings.

Phase 1, which is due back on Tuesday, will report on the human impact of what happened as well as compensation schemes.

“Take (them) off the government completely,” says Jo Hamilton OBE, a high-profile campaigner and former sub-postmistress, who was convicted of stealing from her branch in 2008.

“It’s like the fox in charge of the hen house,” she adds, “because they were the only shareholders of Post Office“.

“So they’re in it up to their necks… So why should they be in charge of giving us financial redress?”

Jo Hamilton OBE, a high-profile campaigner and former sub-postmistress
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Nearly a third of Ms Hamilton’s life has been dominated by the scandal

Jo and others are hoping Sir Wyn Williams, chairman of the public statutory inquiry, will make recommendations for an independent body to take control of redress schemes.

The inquiry has been examining the Post Office scandal which saw more than 700 people wrongfully convicted between 1999 and 2015.

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Sub-postmasters were forced to pay back false accounting shortfalls because of the faulty IT system, Horizon.

At the moment, the Department for Business and Trade administers most of the redress schemes including the Horizon Conviction Redress Scheme and the Group Litigation Order (GLO) Scheme.

The Post Office is still responsible for the Horizon Shortfall scheme.

Lee Castleton OBE, a victim of the Post Office Horizon scandal
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Lee Castleton OBE

Lee Castleton OBE, another victim of the scandal, was bankrupted in 2007 when he lost his case in the civil courts representing himself against the Post Office.

The civil judgment against him, however, still stands.

“It’s the oddest thing in the world to be an OBE, fighting for justice, while still having the original case standing against me,” he tells Sky News.

While he has received an interim payment he has not applied to a redress scheme.

“The GLO scheme – that’s there on the table for me to do,” he says, “but I know that they would use my original case, still standing against me, in any form of redress.

“So they would still tell me repeatedly that the court found me to be liable and therefore they only acted on the court’s outcome.”

He agrees with other victims who want the inquiry this week to recommend “taking the bad piece out” of redress schemes.

“The bad piece is the company – Post Office Limited,” he continues, “and the government – they need to be outside.

“When somebody goes to court, even if it’s a case against the Department for Business and Trade (DBT), when they go to court DBT do not decide what the outcome is.

“A judge decides, a third party decides, a right-minded individual a fair individual, that’s what needs to happen.”

Pic: AP
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Pic: AP

Mr Castleton is also taking legal action against the Post Office and Fujitsu – the first individual victim to sue the organisations for compensation and “vindication” in court.

“I want to hear why it happened, to hear what I believe to be the truth, to hear what they believe to be the truth and let the judge decide.”

Neil Hudgell, a lawyer for victims, said he expects the first inquiry report this week may be “really rather damning” of the redress claim process describing “inconsistencies”, “bureaucracy” and “delays”.

“The over-lawyeringness of it,” he adds, “the minute analysis, micro-analysis of detail, the inability to give people fully the benefit of doubt.

“All those things I think are going to be part and parcel of what Sir Wynn says about compensation.

“And we would hope, not going to say expect because history’s not great, we would hope it’s a springboard to an acceleration, a meaningful acceleration of that process.”

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June: Post Office knew about faulty IT system

A Department for Business and Trade spokesperson said they were “grateful” for the inquiry’s work describing “the immeasurable suffering” victims endured.

Their statement continued: “This government has quadrupled the total amount paid to affected postmasters to provide them with full and fair redress, with more than £1bn having now been paid to thousands of claimants.

“We will also continue to work with the Post Office, who have already written to over 24,000 postmasters, to ensure that everyone who may be eligible for redress is given the opportunity to apply for it.”

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Digital wallet provider Hyperlayer closes in on £30m funding boost

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Digital wallet provider Hyperlayer closes in on £30m funding boost

A British fintech which counts Standard Life among its key clients is close to finalising one of the industry’s biggest funding rounds so far this year.

Sky News understands that Hyperlayer, which is run by the former Morgan Stanley executive Rob Rooney, is lining up a major equity injection led by CDAM, a UK-based investment firm, and several new institutional investors.

City sources said this weekend that the new capital from CDAM and other backers could total at least £30m.

The funding round is expected to take place at a post-money valuation of about £160m.

Hyperlayer, which operates a consumer-facing digital wallet called Hyperjar, intends to use the new funding as growth capital to finance the development of new partnerships with global banks and asset managers.

The company provides smart account technology on existing client infrastructure, and is said to work with a number of the world’s 10 largest banks – although it has not publicly disclosed their identities.

Its work with Standard Life involves the future launch of a consumer money app aimed at people approaching or in early retirement.

Hyperlayer’s consumer-facing platform sees customers organise their money in what the company calls “digital jam jars”, enabling them to earn rewards which give them access to partner brands such as Asda, Morrisons and Starbucks.

IKEA and the John Lewis Partnership are among the other merchant partners with which Hyperlayer is working to develop distinctive loyalty-based initiatives for its financial institution clients.

Read more from Sky News:
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Founded in 2006 by Adam Chamberlain and Scott Davies, CDAM has $1.5bn in assets under management and is an experienced investor in financial services technology.

Mr Davies has had a seat on Hyperlayer’s board for several years.

Mr Rooney, who was a prominent Wall Street executive for years, ultimately serving as Morgan Stanley’s technology operations, joined the company as CEO in 2023.

The new capital injection led by CDAM is understood to be subject to approval by Hyperlayer’s shareholders.

Hyperlayer declined to comment on Sunday.

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Octopus Energy sparks £10bn demerger of tech arm Kraken

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Octopus Energy sparks £10bn demerger of tech arm Kraken

Octopus Energy Group, Britain’s largest residential gas and electricity supplier, is plotting a £10bn demerger of its technology arm that would reinforce its status as one of the country’s most valuable private companies.

Sky News can exclusively reveal that Octopus Energy is close to hiring investment bankers to help formally separate Kraken Technologies from the rest of the group.

The demerger, which would be expected to take place in the next 12 months, would see Octopus Energy’s existing investors given shares in the newly independent Kraken business.

A minority stake in Kraken of up to 20% is expected to be sold to external shareholders in order to help validate the technology platform’s valuation, according to insiders.

One banking source said that Kraken could be valued at as much as $14bn (£10.25bn) in a forthcoming demerger.

Citi, Goldman Sachs, JP Morgan and Morgan Stanley are among the investment banks invited to pitch for the demerger mandate in recent weeks.

A deal will augment Octopus Energy chief executive Greg Jackson’s paper fortune, and underline his success at building a globally significant British-based company over the last decade.

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Octopus Energy now has 7.5m retail customers in Britain, following its 2022 rescue of the collapsed energy supplier Bulb, and the subsequent acquisition of Shell’s home energy business.

In January, it announced that it had become the country’s biggest supplier – surpassing Centrica-owned British Gas – with a 24% market share.

It also has a further 2.5m customers outside the UK.

Octopus energy wind turbine. Pic suppled by Octopus.
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Kraken is an operating system licensed to other energy providers, water companies and telecoms suppliers. Pic: Octopus

Sources said a £10bn valuation of Kraken would now imply that the whole group, including the retail supply business, was worth in the region of £15bn or more.

That would be double its valuation of just over a year ago, when the company announced that it had secured new backing from funds Galvanize Climate Solutions and Lightrock.

Shortly before that, former US vice president Al Gore’s firm, Generation Investment Management, and the Canada Pension Plan Investment Board increased their stakes in Octopus Energy in a transaction valuing the company at $9bn (£7.2bn).

Kraken is an operating system which is licensed to other energy providers, water companies and telecoms suppliers.

It connects all parts of the energy system, including customer billing and the flexible management of renewable generation and energy devices such as heat pumps and electric vehicle batteries.

The business also unlocks smart grids which enable people to use more renewable energy when there is an abundant supply of it.

In the UK, its platform is licensed to Octopus Energy’s rivals EON and EDF Energy, as well as the water company Severn Trent and broadband provider Cuckoo.

Overseas, Kraken serves Origin Energy in Australia, Japan’s Tokyo Gas and Plentitude in countries including France and Greece.

Its biggest coup came recently, when it struck a deal with National Grid in the US to serve 6.5m customers in New York and Massachusetts.

Sources said other major licensing agreements in the US were expected to be struck in the coming months.

Kraken, which is chaired by Gavin Patterson, the former BT Group chief executive, is now contracted to more than 70m customer accounts globally – putting it easily on track to hit a target of 100m by 2027.

Earlier this year, Mr Jackson said that target now risked being seen as “embarrassingly unambitious”.

Last July, Kraken recruited Amir Orad, a former boss of NICE Actimize, a US-listed provider of enterprise software to global banks and Fortune 500 companies, as its first chief executive.

A demerger of Kraken will trigger speculation about an eventual public market listing of the business.

Its growth in the US, and the relative public market valuations of technology companies in New York and London, may put the UK at a disadvantage when Kraken eventually considers where to list.

One key advantage of demerging Kraken from the rest of Octopus Energy Group would be to remove the perception of a conflict of interest among potential customers of the technology platform.

A source said the unified corporate ownership of both businesses had acted as a deterrent to some energy suppliers.

Kraken has also diversified beyond the energy sector, and earlier this year joined a consortium which was exploring a takeover bid for stricken Thames Water.

This weekend, Octopus Energy declined to comment.

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