The average annual water bill will rise by £26% or £123 in the next financial year alone, according to industry figures covering England and Wales.

Water UK confirmed how inflation-busting hikes, determined by the regulator Ofwat in December, would play out from 1 April when a new five-year pricing period begins.

The watchdog allowed bills to rise sharply from 2025-30, but not by as much as suppliers had wanted, to help fund badly needed infrastructure upgrades in key areas, such as storm overflows to prevent sewage spills.

Water UK, which represents the water firms, said the average water and wastewater bill would go up from £480 to £603 during 2025/26 – an increase of about £10 a month.

But the increases will be even harder to swallow for many.

Southern Water customers will see the largest in percentage terms, a 47% increase, taking their average bill to £703.

Bills for households covered by Hafren Dyfrdwy and South West Water will rise by 32%.

Thames Water’s 16 million customers face a 31% hike to £639 – a rise of £151 – at a time when the company is still scrambling to secure its financial future amid a massive debt pile that could yet tip it towards a special administration process.

Water UK explained that the rises may be higher than customers were expecting as the annual totals now included inflation calculations.

The body also said that the increases across households would also vary, depending on circumstances such as water use and whether a water meter was installed.

They will come into force at a time when consumers are facing a surge in other costs.

Industry estimates suggest another hefty increase in energy bills will be seen from April, when the energy price cap is adjusted to reflect higher wholesale prices.

Council tax is also among the bills set for above-inflation rises.

Poorer households get support

Water UK said that it recognised the impact that rising water bills would have on poorer households, pledging that more than three million would receive support worth £4.1bn over the five-year pricing period.

It urged those concerned about paying the increase to contact their supplier.

Water UK also sought to reassure customers that they would see a return, following widespread anger over historic dividends for shareholders.

Water UK said firms would invest around £20bn each year to 2030.

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Upgrade works will include nine new reservoirs and increased capacity at 1,700 wastewater treatment works to reduce pollution and clear up rivers.

Water UK admits rises ‘will be difficult’

Water UK chief executive David Henderson said: “We understand increasing bills is never welcome and, while we urgently need investment in our water and sewage infrastructure, we know that for many this increase will be difficult.

“Water companies will invest a record £20bn in 2025-26 to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers and seas.”

The industry has argued that constraints on bills over 15 years, coupled with climate change and population growth, have been responsible for the growing pollution crisis.

Regulator says bill rises are ‘challenge’

Ofwat has denied this, saying companies must take responsibility.

Its chief executive David Black said of the bill rises ahead: “We recognise the challenge that some customers are facing with increasing financial pressures and understand that the water sector is not the only area where customers are faced with rising costs.

“While water bills will vary depending on the circumstances of each household, the average increase forecasted for 2025/26 will be 26% or £123.

“We have pushed companies to double the amount of support over the next five-year period and strongly encourage customers who are struggling to pay their water bills to contact their water company to access this.”

The government supports a third runway at Heathrow, Chancellor Rachel Reeves has announced.

Ms Reeves said the expansion of Europe’s busiest airport was “badly needed” to connect the UK to the world and open up new opportunities for growth.

A third runway will “unlock further growth, boost investment increase exports and make the UK more open and more connected”, she said.

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It could increase potential GDP (Gross Domestic Product) by 0.43% by 2050 according to a Frontier Economics study, she said. 60% of that boost would go to areas outside London and the southeast, increasing trade opportunities like Scotch whiskey and Scottish salmon, she added.

Ms Reeves said an expansion could create more than 100,000 jobs.

The announcement has been welcomed by some business groups but has been met with anger from London’s Labour mayor Sadiq Khan, the Lib Dems, the Green Party and environmental groups.

Conservative leader Kemi Badenoch told Sky News over the weekend she supports a third runway.

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As part of a speech on funding infrastructure across the UK to promote growth, Ms Reeves said: “Persistent delays have caused doubts about our seriousness towards improving our economic prospects.”

She added that business groups like the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the Chambers of Commerce (BCC), as well as trade unions “are clear – a third runway is badly needed”.

‘Britain is a country of huge potential that is untapped’

Speaking afterwards to Sky’s economics and data editor Ed Conway, Ms Reeves said: “I want Britain to be a magnet for foreign investment… we should be welcoming the best businesses and the best talent in the world. I want businesses around the world, investors around the world, to see in Britain, what I see, which is a country of huge potential that is untapped.”

The chancellor also spoke of helping British companies to scale up.

She said: “We are introducing the capital market reforms, particularly around pension reform, unlocking £80bn of long-term patient capital by creating these mega funds, the mergers of defined contribution and local government pension schemes, to create those larger funds that can invest at scale in the exciting opportunities in the UK.

“Building on what countries like Australia and Canada do with their big pension funds, to support British industry, and particularly that stage of a business career when they’ve had the start-up and the seed funding, but now they’re looking to scale up, but they find that the access to finance isn’t available in the UK, and often look, to example, for the United States.”

Investments in green aviation fuel

Ms Reeves said in her speech that the UK is “already making great strides in transitioning to cleaner and greener aviation” and announced the government is investing £63m over the next year into the Advanced Fuel Fund grant programme to support the development of sustainable aviation fuel production plants.

The government will be accepting proposals until the summer and will then carry out a “full assessment” through the Airport National Policy Statement to “ensure a third runway is delivered in line with our legal, environmental and climate objectives”.

Ms Reeves said the government expects any associated surface transport costs to the third runway’s construction to be financed through private funding.

She added a decision on plans to expand Gatwick and Luton, which are currently under way, will be made by the transport secretary “shortly”.

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A decades-old debate

The debate around whether Europe’s busiest airport should expand has been circling over British politics for decades.

Ms Reeves’s decision will likely put her at odds with Climate Secretary Ed Miliband, who has said airport expansions will not go ahead if they cannot meet climate targets.

However, he said last week he would not resign if the government approved a third runway despite threatening to resign from Gordon Brown’s cabinet as climate change secretary in 2009 over the plans and in 2018 he said an expansion was “very likely” to make air pollution worse.

He has now said the government can meet both its growth and net zero missions together.

London mayor opposes runway

Sadiq Khan said he remained opposed to a third runway “because of the severe impact it will have on noise, air pollution and meeting our climate change targets”.

He said he will carefully scrutinise any new proposals, “including the impact it will have on people living in the area and the huge knock-on effects for our transport infrastructure”.

“Despite the progress that’s been made in the aviation sector to make it more sustainable, I’m simply not convinced that you can have hundreds of thousands of additional flights at Heathrow every year without a hugely damaging impact on our environment,” he added.

Green Party MP Sian Berry said expanding airports “in the face of a climate emergency is the most irresponsible announcement from any government I have seen since the Liz Truss budget”.

Conservative shadow chancellor Mel Stride accused Ms Reeves and Sir Keir Starmer and “their job-destroying budget” of being “the biggest barriers to growth”.

“What’s worse, the anti-growth chancellor could not rule out coming back with yet more tax rises in March,” he added.

“This is a Labour government run by politicians who do not understand business, or where wealth comes from. Under new leadership, the Conservatives will continue to back businesses and hold this government to account.”

Princess Beatrice has given birth to a baby girl named Athena several weeks prematurely, Buckingham Palace has said.

The late Queen’s granddaughter was due to give birth in early spring and was told in December not to travel long distances.

Mother and daughter are now both said to be at home and doing well.

In a statement, the palace said: “Her Royal Highness Princess Beatrice and Mr Edoardo Mapelli Mozzi are delighted to announce the safe arrival of their daughter, Athena Elizabeth Rose Mapelli Mozzi, born on Wednesday 22nd January, at 12.57pm, at Chelsea and Westminster Hospital, London.

“The baby was born weighing four pounds and five ounces.

“Their Majesties The King and Queen and other members of the Royal Family have all been informed and are delighted with the news.”

Mr Mapelli Mozzi posted a tribute to his new daughter, calling her “tiny and absolutely perfect”.

He wrote on Instagram sharing a photograph of Athena wrapped in a blanket: “Athena Elizabeth Rose Mapelli Mozzi.

“We welcomed baby Athena into our lives last week. She is tiny and absolutely perfect.

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“We are all (including Wolfie and Sienna) already completely besotted with her.

“Our hearts are overflowing with love for you, baby Athena.

“A massive thank you from my wife and I goes out to all the wonderful staff at the Chelsea and Westminster Hospital for their exceptional care and support during this incredibly special time.”

The couple share a three-year-old daughter, Sienna. Mr Mapelli Mozzi also has an eight-year-old son, Wolfie.

Princess Beatrice’s sister Princess Eugenie celebrated the new arrival by posting “Welcome Baby Girl” and sharing Mr Mapelli Mozzi’s photograph on her Instagram Stories.