How the climate fight is coming into your home

Published

1 month ago

February 26, 2025

admin

Something has changed dramatically in your home in a way you won’t have even noticed.

The electricity in your plug socket no longer comes from coal, the workhorse of the industrial revolution that powered our economy for decades but which is also the most polluting fossil fuel.

Now it is generated by cleaner gas, renewable and nuclear power.

That shift has helped the UK cut greenhouse gas emissions by 50% since 1990 – a world-leading feat – and you won’t have batted an eyelid.

That’s about to change.

The country’s climate advisers, the Climate Change Committee (CCC), say in new advice today that emissions of greenhouse gases need to fall 87% by 2040.

One third of those emissions cuts will come from decisions made by households.

While the first stage of the country’s national climate action has “gone largely unnoticed”, the next phase will be “a lot more difficult”, said Adam Berman from Energy UK, which represents energy suppliers.

“It’s going to be technically more difficult, it is going to be much more visceral and tangible to people in their everyday lives. It affects how they get to work, what they use to heat their homes and even diet.”

Experts say if we get it right, it will make our lives better with cleaner air and better public transport.

It would also shave hundreds of pounds off annual household bills.

But it depends on what the government does next to help people.

The way we travel

The two “most impactful” things households can do are replacing their car with an electric one and a gas boiler with a heat pump (only when they pack up, and not before), the advice said.

By 2040, the share of electric cars on the road needs to jump from 2.8% in 2023 to 80% in order to meet net zero, according to the recommendations, which the government is not obliged to accept.

They are already cheaper to run than petrol or diesel cars, while the falling cost of batteries means EVs should finally cost the same upfront in the next three years.

The committee’s chief executive Emma Pinchbeck said: “Frankly, by the time a lot of people are going to be choosing a new car, the electric vehicle is just going to be the cheapest [option].”

How we heat our homes

But while the switch to electric vehicles is powering ahead, the move to greener home heating has barely left the starting blocks.

Homes are currently the second highest-emitting sector in the UK economy, and much of that comes from the way we heat them.

The CCC today put to bed calls to keep gas boilers but run them on hydrogen, recommending there be “no role for hydrogen heating in residential buildings”.

Hydrogen is hard to produce in a green way, and so would be reserved for other sectors that have no other viable alternatives.

The government is yet to confirm this decision, which would dismay the gas networks and boiler manufacturers.

Instead, the advisers said people should eventually replace boilers with heat pumps, which run on electricity and work a bit like a fridge in reverse: grabbing and compressing warmth from the outside air and using it to heat your home.

Amid a political row over the costs of net zero, the analysis concluded these two switches could save households around £700 a year on heating bills and a further £700 on motoring costs.

Cutting down on meat and on excessive flying will also play an important, but smaller role they said.

The upfront investment will cost the equivalent of 0.2% of GDP, most of which would come from the private sector.

Overcoming the costs

But at the moment the benefits of these green switches are not spread fairly, and some people can’t access them at all.

The upfront costs of a heat pump – and home upgrades needed alongside – are “sizeable” and price out poorer households, even with current government subsidies, campaigners and the CCC said.

Zachary Leather, an economist at the Resolution Foundation thinktank, said: “While politicians fret and argue about the cost of net zero, today’s report shows that there are long-term benefits for consumers and the environment.”

But the government needs to “get serious” about helping lower-income households to adopt heat pumps and EVs so they can save money too, he said.

Meanwhile, it is still cheaper for someone with a driveway to charge their EV than someone who charges theirs on the street – and electricity prices overall should be made cheaper to help people reap the benefits.

Mr Berman from Energy UK said: “All through the energy system there are these small examples that tend to mean working class households find it more expensive to take up low carbon alternatives.”

The energy transition is ‘not fair yet’

It also comes at a time of wavering support for climate action. While Labour was elected on a mandate to go faster on climate action, the Conservatives have retreated from green issues, and Reform UK wants to dismantle net zero altogether.

Mr Berman said a way to “resolve that question of public consent is to ensure we’re rolling out that infrastructure in a really, really fair and inclusive way. And we’re not there yet”.

The public are also confused about if, when and how to switch to these green technologies, and which government should tackle this with clearer guidance, the CCC said.

Energy Secretary Ed Miliband said: “This advice is independent of government policy, and we will now consider it and respond in due course.

“It is clear that the best route to making Britain energy secure, bringing down bills and creating jobs is by embracing the clean energy transition. This government’s clean energy superpower mission is about doing so in a way that grows our economy and makes working people better off.

“We owe it to current generations to seize the opportunities for energy security and lower bills, and we owe it to future generations to tackle the existential climate crisis.”

Business

Trump trade war escalation sparks global market sell-off

Published

14 hours ago

April 3, 2025

admin

Trump trade war escalation sparks global market sell-off

Donald Trump’s trade war escalation has sparked a global sell-off, with US stock markets seeing the biggest declines in a hit to values estimated above $2trn.

Tech and retail shares were among those worst hit when Wall Street opened for business, following on from a flight from risk across both Asia and Europe earlier in the day.

Analysis by the investment platform AJ Bell put the value of the peak losses among major indices at $2.2trn (£1.7trn).

The tech-focused Nasdaq Composite was down 5.8%, the S&P 500 by 4.3% and the Dow Jones Industrial Average by just under 4% at the height of the declines. It left all three on course for their worst one-day losses since at least September 2022 though the sell-off later eased back slightly.

Trump latest: UK considers tariff retaliation

Analysts said the focus in the US was largely on the impact that the expanded tariff regime will have on the domestic economy but also effects on global sales given widespread anger abroad among the more than 180 nations and territories hit by reciprocal tariffs on Mr Trump‘s self-styled “liberation day”.

They are set to take effect next week, with tariffs on all car, steel and aluminium imports already in effect.

Price rises are a certainty in the world’s largest economy as the president’s additional tariffs kick in, with those charges expected to be passed on down supply chains to the end user.

The White House believes its tariffs regime will force employers to build factories and hire workers in the US to escape the charges.

Economists warn the additional costs will add upward pressure to US inflation and potentially choke demand and hiring, ricking a slide towards recession.

Apple was among the biggest losers in cash terms in Thursday’s trading as its shares fell by almost 9%, leaving it on track for its worst daily performance since the start of the COVID pandemic.

Concerns among shareholders were said to include the prospects for US price hikes when its products are shipped to the US from Asia.

Other losers included Tesla, down by almost 6% and Nvidia down by more than 6%.

Many retail stocks including those for Target and Footlocker lost more than 10% of their respective market values.

The European Union is expected to retaliate in a bid to put pressure on the US to back down.

The prospect of a tit-for-tat trade war saw the CAC 40 in France and German DAX fall by more than 3.4% and 3% respectively.

The FTSE 100, which is internationally focused, was 1.6% lower by the close – a three-month low.

Financial stocks were worst hit with Asia-focused Standard Chartered bank enduring the worst fall in percentage terms of 13%, followed closely by its larger rival HSBC.

Among the stocks seeing big declines were those for big energy as oil Brent crude costs fell back by 6% to $70 due to expectations a trade war will hurt demand.

The more domestically relevant FTSE 250 was 2.2% lower.

A weakening dollar saw the pound briefly hit a six-month high against the US currency at $1.32.

There was a rush for safe haven gold earlier in the day as a new record high was struck though it was later trading down.

Sean Sun, portfolio manager at Thornburg Investment Management, said of the state of play: “Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade.”

He warned there was a big risk of escalation ahead through countermeasures against the US.

Sandra Ebner, senior economist at Union Investment, said: “We assume that the tariffs will not remain in place in the
announced range, but will instead be a starting point for further negotiations.

“Trump has set a maximum demand from which the level of tariffs should decrease”.

She added: “Since the measures would not affect all regions and sectors equally, there will be winners and losers as in 2018 – although the losers are more likely to be in the EU than in North America.

“To protect companies in Europe from the effects of tariffs, the EU should not respond with high counter-tariffs. In any case, their impact in the US is not likely to be significant. It would be more efficient to provide targeted support to EU companies in the form of investment and stimulus.”

Business

British businesses issue warning over ‘deeply troubling’ Trump tariffs

Published

14 hours ago

April 3, 2025

admin

British businesses issue warning over 'deeply troubling' Trump tariffs

British companies and business groups have expressed alarm over President Donald Trump’s 10% tariff on UK goods entering the US – but cautioned against retaliatory measures.

It comes as Business Secretary Jonathan Reynolds launched a consultation with firms on taxes the UK could implement in response to the new levies.

Money blog: Pension top-up deadline days away

A 400-page list of 8,000 US goods that could be targeted by UK tariffs has been published, including items like whiskey and jeans.

On so-called “Liberation Day”, Mr Trump announced UK goods entering the US will be subject to a 10% tax while cars will be slapped with a 25% levy.

The government’s handling of tariff negotiations with the US to date has been praised by representative and industry bodies as being “cool” and “calm” – and they urged ministers to continue that approach by not retaliating.

Business lobby group the CBI (Confederation of British Industry) said: “Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices”.

Industry body the British Retail Consortium (BRC) also cautioned: “Retaliatory tariffs should only be a last resort”.

‘Deeply troubling’

While a major category of exports, in the form of services – like finance and information technology (IT) – has been exempted from the tariffs, the impact on UK business is expected to be significant.

Mr Trump’s announcement was described as “deeply troubling for businesses” by the CBI’s chief executive Rain Newton-Smith.

The Federation of Small Businesses (FSB) also said the tariffs were “a major blow” to small and medium companies (SMEs), as 59% of small UK exporters sell to the US. It called for emergency government aid to help those affected.

“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,” the FSB’s policy chair Tina McKenzie said. “The fallout will stifle growth” and “hurt opportunities”, she added.

Companies will need to adapt and overcome, the British Export Association said, but added: “Unfortunately adaptation will come at a cost that not all businesses will be able to bear.”

Watch dealer and component seller Darren Townend told Sky News the 10% hit would be “painful” as “people will buy less”.

“I am a fan of Trump, but this is nuts,” he said. “I expect some bad months ahead.”

Industry body Make UK said the 25% tariffs on cars, steel and aluminium would in particular be devastating for UK manufacturing.

Cars hard hit

Carmakers are among the biggest losers from the world trade order reshuffle.

Auto industry body the Society of Motor Manufacturers and Traders (SMMT) said the taxes were “deeply disappointing and potentially damaging measure”.

“These tariff costs cannot be absorbed by manufacturers”, SMMT chief executive Mike Hawes said. “UK producers may have to review output in the face of constrained demand”.

The new taxes on cars took effect on Thursday morning, while the measures impacting car parts are due to come in on 3 May.

Business

Trump trade war: The blunt calculation that should have spared UK from reciprocal tariffs

Published

14 hours ago

April 3, 2025

admin

Trump trade war: The blunt calculation that should have spared UK from reciprocal tariffs

Economists immediately started scratching their heads when Donald Trump raised his tariffs placard in the Rose Garden on Wednesday.

On that list he detailed the rate the US believes it is being charged by each country, along with its response: A reciprocal tariff at half that rate.

So, take China for example. Donald Trump said his team had run the numbers and the world’s second-largest economy was implementing an effective tariff of 67% on US imports. The US is responding with 34%.

Trump latest: UK considers tariff retaliation

How did he come up with that 67%? This is where things get a bit murky. The US claims it studied its trading relationship with individual countries, examining non-tariff barriers as well as tariff barriers. That includes, for example, regulations that make it difficult for US exporters.

However, the actual methodology appears to be far cruder. Instead of responding to individual countries’ trade barriers, Trump is attacking those enjoying large trade surpluses with the US.

A formula released by the US trade representative laid this bare. It took the US’s trade deficit in goods with each country and divided that by imports from that country. That figure was then divided by two.

So, in the case of China, which has a trade surplus of $295bn on total US exports of $438bn, that gives a ratio of 68%. The US divided that by two, giving a reciprocal tariff of 34%.

This is a blunt measure which targets big importers to the US, irrespective of the trade barriers they have erected. This is all part of Donald Trump’s efforts to shrink the country’s deficit – although it’s US consumers who will end up paying the price.

But what about the small number of countries where the US has a trade surplus? Shouldn’t they actually be benefiting from all of this?

That includes the UK, with whom the US has a surplus (by its own calculations) of $12bn. By its own reciprocal tariff formula, the UK should be benefitting from a “negative tariff” of 9%.

Instead, it has been hit by a 10% baseline tariff. Number 10 may be breathing a sigh of relief – the US could, after all, have gone after us for our 20% VAT rate on imports, which it takes issue with – but, by Trump’s own measure, we haven’t got off as lightly as we should have.