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Cash usage has grown for the first time in a decade as households look to balance their budgets amid the cost-of-living squeeze.

Across the UK, coins and banknotes accounted for nearly a fifth (19%) of transactions in 2022, according to the British Retail Consortium (BRC) annual Payments Survey.

Its report said: “This year’s Payments Survey shows an increase in cash usage for the first time in a decade, up from 15% (in 2021) to just under 19% of transactions (in 2022).

“Faced with rising living costs, cash was a useful tool for some people to manage their finances and track their day-to-day spending.”

The increase also reflects a natural return to cash following the contactless switch during the COVID pandemic, the report said.

The BRC said it is the first time since its reports started in 2013 that year-on-year cash usage has increased.

“However, the recovery in cash use in retail is fairly minimal, with only a relatively small increase as a share of total sales by value, up from 8.2% in 2021 to 11% in 2022,” the report stated.

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“It appears that whilst a small percentage of people have returned to pre-pandemic habits, for a large portion of the population, the pandemic has had a lasting impact on how much we transact in cash.”

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Card payments were used for 76% of transactions in 2022, with debit cards accounting for around four in five of these transactions.

Retailers spent £1.26bn on card processing fees in 2022, the BRC said.

Alternative payment methods, such as buy now, pay later, increased in popularity in 2022, from 2% of transactions in 2021 to 5% in 2022.

People have also been making smaller but more frequent payments as they manage their budgets.

The number of transactions increased from 17.2 billion in 2021 (47.2 million per day) to 19.6 billion in 2022 (53.7 million per day) and the average transaction value fell from £24.49 to £22.43, as consumers shopped around.

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Shrinkflation: It’s not your imagination, these products are getting smaller

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Shrinkflation: It's not your imagination, these products are getting smaller

KitKats, Gaviscon, toothpaste, and even Freddo have all fallen victim to shrinkflation, consumer group Which? has found.

As families struggle with the cost of a trip to the supermarket, a survey of shoppers revealed how many products are getting smaller – while others are being downgraded with cheaper ingredients.

Among the examples are:

• Aquafresh complete care original toothpaste – from £1.30 for 100ml to £2 for 75ml at Tesco, Sainsbury’s and Ocado

• Gaviscon heartburn and indigestion liquid – from £14 for 600ml to £14 for 500ml at Sainsbury’s

• Sainsbury’s Scottish oats – from £1.25 for 1kg to £2.10 for 500g

• KitKat two-finger multipacks – from £3.60 for 21 bars to £5.50 for 18 bars at Ocado

• Quality Street tubs – from £6 for 600g to £7 for 550g at Morrisons

• Freddo multipacks – from £1.40 for five bars to £1.40 for four bars at Morrisons, Ocado and Tesco

Which? also received reports of popular treats missing key ingredients, as manufacturers seek to cut costs.

The amount of cocoa butter in white KitKats has fallen below 20%, meaning they can no longer actually be sold as white chocolate.

It comes after Penguin and Club bars lost their legal status as a chocolate biscuit, as they now contain more palm oil and shea oil than cocoa – as reported in the Sky News Money blog.

Which? retail editor Reena Sewraz called on supermarkets to be “more upfront” about price changes to help households “already under immense financial pressure” get better value.

While keeping track of the size and weight of products can be tricky, Which? has two top tips for detecting shrinkflation.

The first is to be wary of familiar products labelled as “new” – because the only thing that’s new may end up being the smaller size.

Meanwhile, the second is to pay attention to how much an item costs per 100g or 100ml, as this can be an easy way of finding out when prices change.

What have the companies said?

A spokeswoman for Mondelez International, which makes Cadbury products, said any change to product sizes are a “last resort”, but it’s facing “significantly higher input costs across our supply chain” – including for energy.

A Nestle spokesman said it was seeing “significant increases in the cost of coffee”, and some “adjustments” were occasionally needed “to maintain the same high quality and delicious taste that consumers know and love”.

“Retail pricing is always at the discretion of individual retailers,” they added.

A spokesman for the Food and Drink Federation also pointed to government policy, notably national insurance increases for employers and a new packaging tax.

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Is inflation reaching its peak?

Fresh food prices on the rise

The Which? report comes as latest figures showed fresh food costs 4.3% more than it did a year ago.

The increase in October, reported by the British Retail Consortium (BRC) and market researchers NIQ, was up on the 4.1% year-on-year rise in September.

Overall food inflation was down slightly, though, to 3.7% from last month’s 4.2%.

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There has also been a slowdown in overall shop price inflation, which the BRC said was down to “fierce competition among retailers” ahead of Black Friday sales.

The annual shopping extravaganza will this year arrive in the same week as the chancellor’s budget, which is set for Wednesday 26 November.

BRC chief executive Helen Dickinson called on Rachel Reeves to help “relieve some pressures” keeping prices high, with the national insurance rise in last year’s budget having “directly contributed to rising inflation”.

“Adding further taxes on retail businesses would inevitably keep inflation higher for longer,” Ms Dickinson warned.

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Petrofac administration not a great start to the week for Ed Miliband though relief could come

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Petrofac administration not a great start to the week for Ed Miliband though relief could come

It’s not the start to the week that Ed Miliband, the energy secretary, would have been hoping for: more than 2,000 private sector jobs in Scotland at risk from the collapse of Petrofac, the London-listed oilfield services group.

Its slide into insolvency was triggered by last week’s cancellation of a major contract by its biggest customer, but the failure of a company once valued at more than £6bn has been a long time coming.

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Administrators at Teneo will now attempt to salvage what they can from Petrofac’s wreckage.

“The group’s operations will continue to trade, and options for alternative Restructuring and [sale] solutions are being actively explored with its key creditors,” Petrofac said on Monday morning.

“When appointed, administrators will work alongside Executive Management to preserve value, operational capability and ongoing delivery across the Group’s operating and trading entities.”

For thousands of employees, the future is now uncertain, although people close to the company say they are hopeful that a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

That would be a relief to Mr Miliband, whose energy policy has come under growing scrutiny in recent months amid dire warnings about the future of Britain’s offshore oil industry.

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More than 2,000 jobs at risk as oil and gas company enters administration

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More than 2,000 jobs at risk as oil and gas company enters administration

More than 2,000 Scotland-based jobs are at risk as oil and energy services group Petrofac has applied for administration.

The group’s operations will continue to trade, and options for restructuring of the company and a possible merger or acquisition are being actively explored with its key creditors, the company said on Monday.

People close to the company say they are hopeful a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

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Administrators will work alongside company management to “preserve value, operational capability and ongoing delivery”, its announcement read.

News of a possible insolvency announcement was first reported by Sky News.

Energy Secretary Ed Miliband and other ministers have been briefed on the situation.

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Not a great start to the week for Ed Miliband, though relief could come

It’s not the start to the week that Ed Miliband, the energy secretary, would have been hoping for: more than 2,000 private sector jobs in Scotland at risk from the collapse of Petrofac, the London-listed oilfield services group.

Its slide into insolvency was triggered by last week’s cancellation of a major contract by its biggest customer, but the failure of a company once valued at more than £6bn has been a long time coming.

Administrators at Teneo will now attempt to salvage what they can from Petrofac’s wreckage.

For thousands of employees, the future is now uncertain, although people close to the company say they are hopeful that a buyer can be found swiftly for its North Sea operations, with one suggesting that it could even happen in the coming days.

That would be a relief to Mr Miliband, whose energy policy has come under growing scrutiny in recent months amid dire warnings about the future of Britain’s offshore oil industry.

An advisory firm, Kroll, had been engaged by the Department for Energy Security and Net Zero to work with ministers and officials on the unfolding crisis for the company.

What is Petrofac?

Petrofac employs about 7,300 people globally, according to a recent stock exchange filing.

It designs, constructs and operates offshore equipment for energy companies.

The company has been valued at more than £6bn but has been struggling with debt.

It also faced a Serious Fraud Office investigation, which resulted in a 2021 conviction for failing to prevent bribery, and the payment of millions of pounds in penalties.

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Founded in 1981 in Texas, the business has been in talks about a far-reaching financial restructuring for more than a year.

A formal restructuring plan was sanctioned by the High Court in May this year with the aim of writing off much of its debt and injecting new cash into the business.

This was subsequently overturned, prompting talks with creditors about a revised agreement.

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