Energy price cap falls – but Ofgem boss says it would be ‘helpful’ if govt brings back support for families

Published

1 year ago

August 25, 2023

admin

The energy price cap is going to fall in October – but the boss of Ofgem has warned families are “absolutely going to struggle” with their bills this winter.

A typical household paying by direct debit for gas and electricity will face an annual charge of £1,923 from October to December, a fall of about £150.

Despite that, millions of households could end up paying more because government support with bills – worth £66 a month – has now been withdrawn.

Speaking to Sky News, Ofgem chief executive Jonathan Brearley said it would be “helpful” if these subsidies were reintroduced by the government.

And he stressed that the regulator, the government and suppliers must work together to give vulnerable customers the support they need.

Downing Street has faced growing calls to explore alternatives to the price cap, such as a social tariff that would give cheaper gas and electricity to those in need.

Andrew Bowie, parliamentary undersecretary of state for nuclear and networks, told Sky News that the government “will consider any and all options moving forward”.

When asked whether the price cap will be looked at again, Mr Bowie said: “Over the period of its existence, the price cap has yielded hugely positive results for the British people.

“However, it is right that when times change, circumstances are looked at again, which is why we have a call for evidence open right now, which is why we’re reviewing how the energy market works in this country as a whole.

“We are determined to get it right moving forward.”

Citizens Advice has warned this winter could be “as bad, if not worse” than the last – and a record number of people are already behind on their energy costs.

Calling for the government to step in quickly with targeted support, it said: “The next few months will push households like these over the edge.”

Experts have warned that bills could head back above the £2,000 mark early next year.

Analysis: Poorest could end up paying more

It is better off customers that stand to benefit, while poorer households could end up paying more.

A lower price cap is a move in the right direction – but the extra cash will quickly be absorbed by higher housing and grocery bills

Monthly mortgage payments have spiked as interest rates continue to climb, and food prices are rising at an annual rate of 14.9%.

The new level is also much higher than it was in October 2021, before Russia’s invasion of Ukraine precipitated a global energy crisis.

Back then, the price cap came in at £1,277.

Read Gurpreet’s full analysis here.

Price cap changes announced

The price a supplier can charge for gas is falling from 6.9p to 6.89p per kilowatt hour (kWh) – with the cost of electricity dropping from 30.1p per kWh to 27.35p.

Weaker wholesale prices have led to this reduction – and Ofgem says the market is stabilising, with suppliers returning to a healthier financial position.

The price cap would have been lower still, by a further £100, if it had reflected a looming Ofgem calculation that gives a nod to reduced energy use.

The regulator has also unveiled measures to reduce costs for prepayment meter customers – alongside extra support for those at risk of disconnection from the network.

But there has also been a small increase to the earnings that energy firms can make per household – an extra £10 a year – most of which is ringfenced in the event of a supplier failure.

Ofgem says that, at the peak of the energy crisis, 30 suppliers went bust because they didn’t have enough capital in reserve to stay in business – adding £83 to the bills of all customers.

An ‘encouraging’ fall

Household consumption has fallen sharply following the bill shocks of the past 18 months.

Energy Security Secretary Grant Shapps described October’s fall in the price cap as “encouraging” – and claimed it was another milestone in the government’s promise to halve inflation.

“We are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes,” he added.

But Labour’s shadow energy and net zero secretary, Ed Miliband, claimed the latest price cap announcement “demonstrates the scandalous Tory cost of living crisis is still raging for millions of people”.

He claimed the government was siding with oil and gas companies making record profits, adding: “Higher energy bills are unfortunately here to stay under the Conservatives, even with this fall, bills are significantly higher than they were only three years ago.”

The next price cap announcement – covering January to March 2024 – will be made in three months’ time.

‘Millions’ will pay more

A thinktank has declared millions of the poorest households will pay more despite the price cap cut.

The Resolution Foundation blamed the withdrawal of energy support schemes and a rise in charges added to bills.

The price cap – which applies to England, Wales and Scotland – sets a limit on the amount suppliers can charge for each unit of gas and electricity used and for the privilege of being connected to the energy network. The more you use, the more you pay.

Even at the reduced cap mark, it remains about £800 above 2019 levels at a time when families are dealing with high inflation and higher housing costs – mostly as a consequence of interest rate rises by the Bank of England intended to dull the pace of price rises in the economy.

Ofgem has said it now expects suppliers to continue improving service and support their most vulnerable customers.

David Cheadle, chief operating officer at the Money Advice Trust, said it is an “extremely worrying time” for households struggling to keep up with their bills – and many consumers will face “impossible choices without further support”.

UK

Ellis Cox: Mother appeals to catch son’s killer on birthday anniversary

Published

49 mins ago

January 18, 2025

admin

Ellis Cox: Mother appeals to catch son's killer on birthday anniversary

Fresh appeals have been made for information on what would have been the 20th birthday of Ellis Cox, who was shot dead in Liverpool last June.

A number of people have been arrested in connection with the murder at Liver Industrial Estate, but no one has been charged yet.

The 19-year-old’s family and police have paid tribute to him and called for those with information to come forward.

He was shot in the back after a confrontation between his friends and another group of up to three males on Sunday 23 June.

His mother Carolyn paid tribute in an appeal to coincide with what would have been his 20th birthday.

“He was so kind… so laid back, so calm, so mature for his age. And he was just funny. Very funny.

“He was my baby… no mum should have to bury a child. He was my life. And I don’t know what to do without him.”

Meanwhile, his aunt Julie O’Toole said he was “the sort of person I think you’d be hard pressed to find anyone to say anything negative about. He was loyal, fiercely loyal… everything was about his family”.

To pay tribute to Ellis, Liverpool City Council will be lighting up the Cunard Building and Liverpool Town Hall in orange on Saturday.

Detective Chief Inspector Steve McGrath, the senior investigating officer, spoke about the information gathered so far, six months on from Mr Cox’s murder.

“I’m satisfied that the group that he was with was probably the target… and I would say that’s got something in relation to do with localised drug dealing in that area. But Ellis had no involvement in that whatsoever,” he said.

He added that police are looking for “really significant pieces of evidence now”, including “trying to recover the firearm that was used in relation to this, looking to recover the bikes that were used by the offenders”.

Mrs Cox also appealed for people to come forward with information.

“If you know anything, don’t let us get to [his] next birthday and still know nothing.

“We need to get justice for Ellis. And we need to get the people who took him from us off the streets.”

UK

Manchester United legend Denis Law dies aged 84

Published

12 hours ago

January 17, 2025

admin

Manchester United legend Denis Law dies aged 84

Former Manchester United and Scotland footballer Denis Law has died, at the age of 84.

In a statement, his family said: “It is with a heavy heart that we tell you our father Denis Law has sadly passed away. He fought a tough battle, but finally, he is now at peace.

“We would like to thank everyone who contributed to his wellbeing and care, past and much more recently.

“We know how much people supported and loved him and that love was always appreciated and made the difference.”

The Aberdeen-born footballer previously announced in August 2021 that he had been diagnosed with dementia.

A prolific striker, Law scored 237 goals in 404 appearances for Manchester United, for whom he signed for a then-British record transfer fee in 1962.

He is the only man to have two statues dedicated to him at Old Trafford – one on the Stretford End concourse, the other as part of the United Trinity statue overlooking the stadium’s forecourt beside fellow great George Best and Sir Bobby Charlton.

The only Scottish player to have won the Ballon d’Or award, in 1964, he was also part of United’s triumphant campaign in the 1968 European Cup – in which they became the first English club to ever win the competition.

In a statement, the club said: “Everyone at Manchester United is mourning the loss of Denis Law, the King of the Stretford End, who has passed away, aged 84.

“He will always be celebrated as one of the club’s greatest and most beloved players.

“The ultimate goalscorer, his flair, spirit and love for the game made him the hero of a generation. Our deepest condolences go out to Denis’s family and many friends. His memory will live on forever more.”

Wayne Rooney, former United captain and the club’s all-time record goalscorer, described Law as a “legend”.

“Thoughts with all Denis’s family and friends,” he said in an online post.

Another former United captain, Gary Neville, said: “A great footballer and a great man. It’s a privilege and an honour to have spent time in your company. The King of the Stretford End.”

A tribute from the Scotland national team said Law was “a true great”.

“We will not see his likes again,” it said.

Law also played for Huddersfield Town, Manchester City, and Italian club Torino during his club career, and made 55 appearances for Scotland, scoring 30 goals for his country.

Manchester City said in a post on X: “The whole of Manchester, including everyone at City, is mourning with you. Rest in peace, Denis.”

UK

FTSE 100 closes at record high

Published

13 hours ago

January 17, 2025

admin

The UK’s benchmark stock index has reached another record high.

The FTSE 100 index of most valuable companies on the London Stock Exchange closed at 8,505.69, breaking the record set last May.

It had already broken its intraday high at 8532.58 on Friday afternoon, meaning it reached a high not seen before during trading hours.

Money blog: Major boost for mortgage holders

The weakened pound has boosted many of the 100 companies forming the top-flight index.

Why is this happening?

Most are not based in the UK, so a less valuable pound means their sterling-priced shares are cheaper to buy for people using other currencies, typically US dollars.

This makes the shares better value, prompting more to be bought. This greater demand has brought up the prices and the FTSE 100.

The pound has been hovering below $1.22 for much of Friday. It’s steadily fallen from being worth $1.34 in late September.

Also spurring the new record are market expectations for more interest rate cuts in 2025, something which would make borrowing cheaper and likely kickstart spending.

What is the FTSE 100?

The index is made up of many mining and international oil and gas companies, as well as household name UK banks and supermarkets.

Familiar to a UK audience are lenders such as Barclays, Natwest, HSBC and Lloyds and supermarket chains Tesco, Marks & Spencer and Sainsbury’s.

Other well-known names include Rolls-Royce, Unilever, easyJet, BT Group and Next.

FTSE stands for Financial Times Stock Exchange.

If a company’s share price drops significantly it can slip outside of the FTSE 100 and into the larger and more UK-based FTSE 250 index.

The inverse works for the FTSE 250 companies, the 101st to 250th most valuable firms on the London Stock Exchange. If their share price rises significantly they could move into the FTSE 100.

A good close for markets

It’s a good end of the week for markets, entirely reversing the rise in borrowing costs that plagued Chancellor Rachel Reeves for the past ten days.

Fears of long-lasting high borrowing costs drove speculation she would have to cut spending to meet self-imposed fiscal rules to balance the budget and bring down debt by 2030.

Long-term government borrowing had reached a high not seen since 1998 while the benchmark 10-year cost of government borrowing, as measured by 10-year gilt yields, was at levels last seen around the 2008 financial crisis.

The gilt yield is effectively the interest rate investors demand to lend money to the UK government.

Only the pound has yet to recover the losses incurred during the market turbulence. Without that dropped price, however, the FTSE 100 record may not have happened.

Also acting to reduce sterling value is the chance of more interest rates. Currencies tend to weaken when interest rates are cut.