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The UK economy, high inflation, rising interest rates, and the increasing cost of living

<b>Energy firms face deadline in review of direct debit hikes</b>

Some energy suppliers have been given a three-week deadline to explain accusations they have increased customers' direct debit payments by "more than is necessary".
Jonathan Brearley, boss of the energy regulator Ofgem, recently said there were "troubling signs" of the tactic.
He also expressed concern over customers being directed to inappropriate deals.
Official reviews have now been launched.

Mr Brearley had said in April that reviews were imminent, but the development emerged from an update published on Twitter by Business Secretary Kwasi Kwarteng.

Mr Kwarteng said that some energy companies had been increasing direct debits beyond what was required.
"I can confirm Ofgem has today issued compliance reviews," Mr Kwarteng's tweet went on.
"The regulator will not hesitate to swiftly enforce compliance, including issuing substantial fines."
However, by reviewing the issue, Ofgem has yet to draw a firm conclusion on whether any rules have been broken.
An Ofgem spokesperson said: "Our top priority is to protect consumers and we recently wrote to suppliers to alert them that we are commissioning a series of market compliance reviews to ensure, amongst other things, that they are handling direct debits fairly, and that overall, they are held to higher standards for performance on customer service and protecting vulnerable customers."
A spokesman for Energy UK, which represents energy companies, said: "Suppliers are required to set [direct debits] at a fair and reasonable level based on the customer's individual circumstances, taking into account factors like previous energy use or record with previous payments.
"It is right that the regulator is looking to ensure that suppliers are complying with those requirements. Customers who do have concerns with the level of their direct debit payments should contact their supplier."

Prime Minister Boris Johnson had earlier acknowledged "there is more that we can do" to help families struggling with rising fuel and energy bills.
Opposition parties have called for a windfall tax on energy company profits, with Labour accusing him of offering "no answers" to a "cost of living crisis".

On 1 April, yearly bills increased by an average of £693 for about 18 million households on standard tariffs.
And some 4.5 million prepayment customers saw an average increase of £708 - from £1,309 to £2,017.
Mr Brearley, chief executive of Ofgem, wrote in a blog on Ofgem's website in April that the regulator had received information from consumer groups and the public about "bad practices" by some suppliers.
"We are also seeing troubling signs that some companies are reacting to these changes by allowing levels of customer service to deteriorate," he wrote.
He added that they were also concerned about "the way some vulnerable customers are being treated when they fall into difficulties".
The regulator has powers to issue "substantial fines" of up to 10% of turnover to firms found failing to comply.

https://www.bbc.co.uk/news/business-61309576
 
Cost of living crisis worsening as shop prices rise at fastest rate in more than a decade
The British Retail Consortium said growing shop prices reflect the impact of energy costs, the war in Ukraine and the COVID-19 lockdown in China.


Shop prices increased at their fastest rate in more than a decade last month, the British Retail Consortium (BRC) has said.

Retail prices went up from 2.1% in March to 2.7% in April, according to the BRC-NielsenIQ price index.

This was the highest annual rate of inflation it recorded since September 2011.

The figures will increase the pressure on Boris Johnson to do more to address the cost of living crisis, coming just a day before the local elections.

Helen Dickinson, chief executive of the BRC, said: "The impact of rising energy prices and the conflict in Ukraine continued to feed through into April's retail prices.

Food prices grew by 3.5% in the year to April, up from 3.3% in March.

Helen Dickinson, chief executive of the BRC, said: "The impact of rising energy prices and the conflict in Ukraine continued to feed through into April's retail prices.

Food prices grew by 3.5% in the year to April, up from 3.3% in March.

But the increase slowed slightly for fresh food, from 3.5% in March to 3.4% in April, which Ms Dickinson attributed to "fierce competition between supermarkets".

"Global food prices have reached record highs, seeing a 13% rise on last month alone, and even higher for cooking oils and cereals," she said.

"As these costs filter through the supply chain, they will place further upward pressure on UK food prices in the coming months.

"Retailers will continue to do all they can to keep prices down and deliver value for their customers by limiting price rises and expanding their value ranges, but this will put pressure on them to find cost savings elsewhere.

"Unfortunately, customers should brace themselves for further price rises and a bumpy road ahead."

Mike Watkins, head of retailer and business insight at research firm NielsenIQ, said consumers are likely to curb their spending habits in response to growing inflation and rising living costs, like energy bills.

The Bank of England has warned that inflation - which reached 7% in March - could exceed more than 8% this year.

"With food retailing no longer immune to these pressures, supermarkets are reacting by cutting the prices of some everyday grocery products," he said.

Prices for products other than food went up by 2.2% in the year to April - the highest rate since records began in 2006.

This compares with an increase of 1.5% in the year to March.

Ms Dickinson said furniture, electricals and books are seeing the biggest surges.

"This has been exacerbated by disruption at the world's largest seaport, following Shanghai's recent lockdown," she said.
https://news.sky.com/story/cost-of-...t-fastest-rate-in-more-than-a-decade-12604935
 
The Bank of England has raised the base rate of interest to 1% - the fourth consecutive increase as it continues to move against surging inflation - despite issuing a warning about a recession ahead.

The Bank forecast that the UK economy will shrink later this year in the face of double-digit inflation and an unprecedented squeeze on household incomes.

In its first forecast since the Russian invasion of Ukraine, the Bank said it now expected the energy price crunch to leave a lasting scar, pushing up unemployment and contributing to weak or negative growth throughout 2023.

Despite this, the Bank's monetary policy committee (MPC) also voted to increase interest rates by a quarter percentage point to 1% - the highest level for borrowing costs since 2009.

Three of the nine MPC members voted for an even sharper increase of half a percentage point, and the Bank said "most members of the committee judged that some degree of further tightening in monetary policy might still be appropriate in the coming months".

The Bank's forecast underlines the challenges facing households, with higher energy costs, higher taxes and higher interest rates likely to depress household spending dramatically as the year goes on.

When will economy improve? What might this mean for house prices? Your questions answered as interest rate hiked

According to the Bank, real household disposable income and real post-tax labour income - two measures of the impact on families - will both fall sharply this year as those energy price rises feed through into the system.

The Bank slashed its forecast for gross domestic product growth next year from 1.25% to -0.25% - the closest it ever tends to come to forecasting a recession.

The technical definition of a recession is typically two successive quarters of contraction. The Bank's projections imply a sharp fall of nearly 1% in the final quarter of this year, as energy bills rise in line with the latest Ofgem price cap, followed by weak GDP, for most of 2023 and another quarter of contraction that autumn.

It said that unemployment would also begin to climb, with the rate rising to 5.5% by the middle of 2025.

But perhaps most striking of all its forecasts is that inflation, as measured by the consumer price index, would rise to 10.25% towards the end of this year - nearly double its previous forecast of 5.75%.

That level of inflation would be the highest the UK has faced in four decades, since the early 1980s, when Britain was at the tail-end of a long period of stagflation - high inflation and low growth.

It is comfortably the highest inflation forecast since the Bank was granted independence to set monetary policy in 1997.

Andrew Bailey, the Bank's governor, said the predicted slowdown in economic growth mainly reflects the significant negative impact of sharp price rises on most UK households' real incomes.

"We think most of the work to bring inflation down will be done by, unfortunately, the severity and scale of this shock to real incomes, which I'm afraid to say has gotten worse in the last three months since we last produced a report because, obviously, of the impact of the terrible events in Ukraine," he told Sky News.

In a news conference, he said total real household disposable income is projected to fall by 1.75% in 2022 which - apart from 2011 - will be the largest contraction since comparable records began in 1964.

"I recognise the hardship this will cause for many people in the UK, particularly those on the lowest incomes, often with little or no savings, that were hit hardest by increases in the prices of basic necessities like food and energy," he said.

Asked if he is making life tougher for families by increasing interest rates, he told Sky News: "What would make it even tougher for families is if inflation kept on rising even more."

The Bank warned that its forecasts are predicated on what traders and investors in the market expect them to do with interest rates - a sharp increase to 3% by the middle of next year. Only a few economists expect that to happen.

So the economic crunch may be somewhat less severe than its headline figures. That said, even leaving borrowing costs where they are would not prevent a contraction at the end of this year.

Financial market reaction to the Bank's voting and latest predictions saw the pound fall by more than a cent against both the dollar and the euro. Sterling was almost two cents down on the day versus the US currency at $1.24.

The Bank also said that with interest rates now having reached 1%, it would begin researching when and how to begin reversing quantitative easing - the programme under which it has created money to buy hundreds of billions of bonds in an effort to bolster the economy since the financial crisis.

SKY
 
The government will not be bringing forward an emergency budget in light of the cost of living crisis, but "will be saying more and doing more to help people", Michael Gove has said.

Responding to the government's Queen's Speech on Tuesday, Labour leader Sir Keir Starmer claimed the government was "bereft of ideas" as the nation heads towards a "stagflation crisis".

In response, Boris Johnson replied: "We will continue to use all our ingenuity and compassion for as long as it takes and the chancellor and I will be saying more about this in the days to come."

But a Treasury spokesman said immediately after the PM's comments that there would be no emergency budget.

Speaking to Sky News on Wednesday, the levelling up secretary said Mr Johnson's words were "over interpreted".

Asked whether the PM or Treasury spokesperson were correct, Mr Gove added: "They're both right and there won't be an emergency budget."

He continued: "It is sometimes the case that the words from a prime minister or minister are overinterpreted.

"The prime minister is right. We will be saying more and doing more in order to help people with the cost of living challenge we face at the moment, but that doesn't amount to an emergency budget. It is part of the work of government.

"Last night the prime minister convened a group of ministers - we have all done work on some of the things we could do to help. Those policy initiatives will be announced by individual departments in due course as they are worked up.

"It is part of the process for a government that is always and everywhere thinking of how we can help and how we can provide support, both short term and long term."

Households are currently facing rising energy bills, inflation is forecast to hit 10% and benefits and wages failing to keep up with the increase in prices.

On Tuesday, Mr Johnson acknowledged that the aftershocks from the pandemic had seen energy and food prices surge across the world.

He warned there were limits on how much public money he was prepared to commit to addressing a global economic crisis.

But he spoke of using the "fiscal firepower" of the government to ease the situation in a strong hint at future help for households under strain.

Last month, chancellor Rishi Sunak said he would need to see how far fuel prices go up before coming forward with new measures.

"Depending on what happens to bills then, of course, if we need to act and provide support for people, we will," he told Mumsnet at the time.

"But it would be silly to do that now or last month or the month before when we don't know exactly what the situation in the autumn will be."

Sir Keir said the Queen's Speech was "the latest chapter in a pathetic response to the cost of living crisis", adding that Britain needed "a government of the moment with the ideas that meet the aspirations of the British public".

He called for measures including an emergency budget, a windfall tax on energy companies and a better plan to avoid more energy crises in the future such as by standing up to opponents of onshore windfarms.

Meanwhile, Liberal Democrat leader Sir Ed Davey later asked for clarity about what help might be coming after the PM's hint followed by the Treasury "saying they have no idea what the prime minister is referring to".

Speaking to Sky News on Wednesday, he called for a VAT cut and for a windfall tax on energy firms' profits.

Minister have consistently highlighted the £22bn package of government help with energy bills, tax cuts and other measures.

But the Queen's Speech received criticism from some for not containing any new measures to help rising household costs.

Speaking to reporters later on Wednesday, the PM's official spokesman confirmed the government's new cost of living committee met for the first time on Tuesday following the Queen's Speech.

"You can expect there to be more work done off the back of that discussion. The prime minister urged ministers to go faster and be as creative as possible in ensuring the government is doing everything on this important issue," the spokesman said.

"You can expect the committee to meet fairly regularly to progress the work as soon as possible.

"In the days to come you will hear more from the prime minister on this. The chancellor and the prime minister are working extremely closely on this and will continue to do so."

https://news.sky.com/story/cost-of-...t-over-interpreted-michael-gove-says-12610325
 
Same thing is happening here in Canada.

Prices are rising. Inflation is rising.

I hope things will go back to normalcy again.
 
Cost of living worries sends consumer confidence into 'freefall', says study
Based on 6,000 interviews across the month, the confidence survey measures attitudes to household finances, property prices, job security and business activity.

Concern about the cost of living has hit a record high as UK households continue to "bear the brunt".

A new survey says confidence in household finances over the short term, hit an all-time low in April, dropping by six points on the previous month and a "massive" 57 points compared with April last year to 56.7.

The 12-month outlook also hit a new low, inching downwards from 49.1 to 48.3.

The study from YouGov and the Centre for Economics and Business Research (CEBR) found that overall consumer confidence has fallen one point since March but 7.6 points since this time last year.

Other metrics such as house value, job security, and business activity remain stable, the survey suggests.

The new statistics come ahead of the release of new UK GDP figures which are expected to put growth at 1% for the first quarter of this year, down from 1.3 for quarter 4 last year.
Sky News
 
The UK economy contracted by 0.1% in March, as surging inflation took a toll on demand to offset the boost that had been expected from the end of COVID restrictions.

The monthly figure compares to no growth in February and 0.7% growth in January, while the quarterly figure (between January and March) showed a growth of 0.8%, which was down from 1.3% in the previous three months.

Chancellor Rishi Sunak said: "The UK economy recovered quickly from the worst of the pandemic and our growth in the first few months of the year was strong - faster than the US, Germany and Italy, but I know these are still anxious times.

"Our recovery is being disrupted by Putin's barbaric invasion of Ukraine and other global challenges but we are continuing to help people where we can.

"Growth is the best way to hep families in the longer-term so as well as easing immediate pressure on households and businesses, we are investing in capital, people, and ideas to boost living standards in the future."

The Office for National Statistics data was released as alarm bells ring over the country's economic prospects, with the Bank of England warning last week that a recession now loomed large due to the cost of living crisis gathering pace.

Families and businesses are straining under a weight of global price increases largely caused by demand outstripping supply as the COVID crisis eases and, latterly, the effects of Russia's war in Ukraine.

No let-up in inflation

Separate figures released by the ONS next week are tipped by economists to show inflation nearing a 40-year high in April, at around 8.5%.

The leap, from the March level of 7%, will be mostly a consequence of higher energy costs being passed on down the supply chain, raising the cost of doing business and ultimately the cost of everyday goods and services.

There is also one direct price shock to be reflected for the first time: the unprecedented £693 hike in the energy price cap for households that took hold on 1 April.

Alice Haine, personal finance analyst at DIY investment platform Bestinvest, said: "There is a high risk of an ongoing contraction in the coming months as the squeeze on real incomes ramps up amid the cost-of-living crisis, with inflation heading for double figures, all of which raises the spectre of stagflation (a combination of negative or stagnant economic growth and high inflation)."

Daniel Casali, chief investment strategist at Tilney Smith & Williamson, said: "Importantly for the UK economy, both labour demand and business investment intentions remain firm.

"This should at least reduce the risk of a sharp downturn in overall growth. The Bank of England expects GDP to be flat in the second quarter, though there is the potential for a modest contraction."

'There is nobody around'

For many small business owners, however, the situation is already desperate.

Barry Whitehouse, owner at Banbury-based art shop, The Artery, said: "We have just had one of our worst weeks since the previous recession. Total takings for the week didn't even cover the wages of the staff.

"Loss of footfall and empty streets makes creating a sale or greeting a customer impossible. There is nobody around.

"Online sales have fallen sharply as everyone has one eye on their energy bills to see what money is left, and there is suddenly a drop in enquiries for shop items and our classes.

"I am really worried.

"My savings have gone and I have nothing left to keep the business afloat without sales and footfall. I will not survive many more weeks like this."

Sandra Wilson, director of Ipswich-based recruitment and HR firm Cottrell Moore, said: "The UK economy is starting to feel like a theatre of cruelty.

"Whether you're a pessimist or an optimist, the reality is the same: we are all paying out more and most of us aren't earning more.

"The economic sea is getting extremely choppy and many people will go overboard if the Government doesn't take action immediately."

Dave Kelly, co-founder of Bristol-based butcher Ruby & White, said: "Right now, it feels like the UK economy is headed for the slaughterhouse.

"Inflation, soaring energy bills, tax and interest rate rises are crippling households around the country. Worst of all, it feels like the government is watching on and doing nothing.

"For us, sales are still holding up for now but we are seeing slightly more people order cheaper cuts. We're probably being helped by the fact that more people are choosing to stay in than go out."

https://news.sky.com/story/inflatio...lows-to-0-8-in-first-quarter-of-2022-12610748
 
Jacob Rees-Mogg has said that plans to cut more than 90,000 civil service jobs in order to free up billions of pounds for measures to ease the cost of living crisis does not amount to the return of austerity.

During an away-day with cabinet ministers in Stoke-on-Trent on Thursday, the prime minister asked cabinet ministers to report back within a month on how they can reduce the size of their departmental workforces to 2016 levels.

The move would imply a reduction of about a fifth of the 475,000-strong workforce, which the government says would save about £3.5bn a year.

Speaking to Sky News on Friday, Minister for Brexit Opportunities and Government Efficiency Jacob Rees-Mogg said the government is trying to get the civil service "back to normal" after taking on "extra people for specific tasks" including COVID-19 and Brexit.

Politics latest: 'Stitch-up' Labour selection row

Asked if reducing the number of civil servants constitutes a return to austerity, Mr Rees-Mogg said: "I don't think it is because what is being done is getting back to the efficiency levels we had in 2016."

He said the easiest way to cut staffing levels is "to have a freeze on recruitment", as "up to 38,000 people each year leave the civil service".

Mr Rees-Mogg added: "But there will be efficiencies that you can get in some departments through increased automation, increased use of technology, which is something that all sensible businesses will be doing perfectly reasonable and sensible ambition."

He continued: "The only bit that is ideological is that we should spend taxpayers' money properly and not wastefully.

"It's about doing things properly. It's about governing effectively and recognising that every penny we take in tax has to come off the backs of people working hard."

Amid the discussion on civil service efficiency, it was pointed out to Mr Rees-Mogg that he had arrived for his morning broadcast round alongside a handful of advisers.

Asked whether all were necessary, he said: "They don't all work directly for me. They work within the Cabinet Office - and two are my special advisers."

The announcement was described as "either another headline-grabbing stunt or a reckless slash-and-burn to public services" by the head of the civil servants' union the FDA.

It comes as Mr Johnson faces pressure to do more to address the cost of living crisis, which has seen inflation soar to its highest level in three decades - with Tory MPs pressing for tax cuts and Labour accusing him of being "bereft of ideas".

The PM told the Daily Mail, which first reported the planned cuts, that the civil service had become "swollen" during the pandemic.

He added: "Every pound the government pre-empts from the taxpayer is money they can spend on their own priorities, on their own lives."

The announcement appears to flesh out a comment from the PM during the Queen's Speech debate earlier this week, when he spoke about needing to "cut the cost of government".

ITV News reported that the PM and chancellor met on Monday to start drawing up the plan, which would include a ban on vacancies being filled without special permission from ministers.

Downing Street did not rule out compulsory redundancies under the plans.

A Number 10 spokesman said: "I'm not going to pre-empt specific measures."

He said a lot of the cuts are hoped to be done through "natural wastage".

Civil service unions are already at odds with ministers, led by Jacob Rees-Mogg, who are trying to pressure civil servants who have been working from home during the pandemic to return to Whitehall desks.

Dave Penman, general secretary of the FDA union, tweeted: "Ultimately they can cut the civil service back to 2016 levels, but they need to decide what the civil service must then stop doing as a consequence.

"Will the Passport Office be cut back? Or the Dept of Health and Social Care?

"Unless they've got a serious plan, it's either another headline-grabbing stunt or a reckless slash-and-burn to public services without a thought or care about the consequences."

Speaking to Sky News on Friday, Mr Rees-Mogg accepted "there is a place for working from home" but said public services had at times been negatively impacted by remote working.

A Labour spokesperson said: "The cabinet said they would focus on the cost of living crisis facing families across the country.

"Instead of implementing an emergency budget they have chosen to let down working people once again through pointless rhetoric and lack of action."

https://news.sky.com/story/cost-of-...rn-to-austerity-jacob-rees-mogg-says-12611826
 
90,000 civil servants!!!

This is either a desperation cull to rush through some popular tax cuts, or an admission that many jobs in government are wasteful and useless.
 
Last edited:
<b>Health campaigners say the government's obesity strategy is "falling apart", after it delayed bans on multi-buy deals for junk food and pre-watershed TV advertising for at least a year.</b>

Chef Jamie Oliver said banning adverts was vital to protecting child health.
Multi-buy deals made "people spend more on junk, and less on healthy food", the Children's Food Campaign said.

<b>But ministers say they are deferring the policy to assess its impact on the cost of living crisis.</b>

The Department of Health and Social Care (DHSC) said the planned ban - due to be brought in in October - on "buy one get one free" (Bogof) deals for food and drinks high in fat, salt or sugar (HFSS) as well as free refills for soft drinks, would be put on hold for 12 months.

Plans to restrict TV advertising of junk foods before the 21:00 GMT watershed and paid-for online adverts are also being paused and will not come into force until January 2024, the department added.
It added curbs on junk food placement in stores would still go ahead this October.

Full story at:
https://www.bbc.co.uk/news/uk-61449921
 
The average price of a litre of diesel has hit a new record high, according to industry data, signalling further financial pressure on households and businesses alike amid the deteriorating cost of living crisis.

Motoring group the AA said petrol costs were also now just 1p a litre shy of striking their highest ever level as it revealed the latest set of figures showing prices at levels last seen in March, before action from the chancellor to help bring down pump costs.

Data from Experian Catalist showed the average diesel price at 180.29p on Sunday.

That was up from the 179.9p seen on the day of the spring statement by Rishi Sunak, which cut fuel duty by 5p a litre for a year.

Average pump prices reached 166.65p a litre for petrol at the weekend, just shy of the 167.3p seen on 22 March.

Another motoring group, the RAC, suggested a link between rising diesel costs and efforts to reduce supplies of Russian diesel due to Moscow's invasion of Ukraine.

At the same time, Greenpeace said on Monday that its activists had stopped a tanker carrying 33,000 tonnes of Russian diesel from docking in the Thames.

SKY
 
Just read that this inflation may send upto 40 % of the brits into poverty by next winter. That is quite alarming. What is the gov in UK doing to combat this?

On the other side a country like Norway which is already rich is cashing in big time on the increasing energy prices. Norway is the third largest exporter of natural gas in the World and the biggest producer of Oil in Europe apart from Russia and the billions are ticking in.
 
IAJ said:
Just read that this inflation may send upto 40 % of the brits into poverty by next winter. That is quite alarming. <b>What is the gov in UK doing to combat this?</b>
Click to expand...

Absolutely nothing.

It feels like the damage has already been done and things are just going to get worse and worse from here. Worrying times.
 
IAJ said:
Just read that this inflation may send upto 40 % of the brits into poverty by next winter. That is quite alarming. What is the gov in UK doing to combat this?

On the other side a country like Norway which is already rich is cashing in big time on the increasing energy prices. Norway is the third largest exporter of natural gas in the World and the biggest producer of Oil in Europe apart from Russia and the billions are ticking in.
Click to expand...

The gov has asked people to work more hours or find better paying jobs if they are struggling.

Other ministers havd recommended buying value products and learning to cook.

I'm not kidding.
 
DeadlyVenom said:
The gov has asked people to work more hours or find better paying jobs if they are struggling.

Other ministers havd recommended buying value products and learning to cook.

I'm not kidding.
Click to expand...

That interview was a shocker.

The minister might now get quietly demoted.
 
Majority are struggling cos they are drowning in debt. Tough. Go work longer hours instead of borrowing from the future to live in the present.

Should have saved for a rainy day instead of spending what you didn't have on bling. No pity.
 
Technics 1210 said:
Majority are struggling cos they are drowning in debt. Tough. Go work longer hours instead of borrowing from the future to live in the present.

Should have saved for a rainy day instead of spending what you didn't have on bling. No pity.
Click to expand...

The problem is also systemic.

Our monetary system is based on borrowing.
 
Inflation has hit its highest level in 40 years amid the deteriorating cost of living crisis.

The rate shot up to 9% last month - its highest level since comparable readings in 1982.

Data released by the Office for National Statistics (ONS) showed a broad-based hike in prices for everyday goods and services during April - with almost three-quarters of the increase accounted for by the unprecedented 54% increase in the energy price cap which kicked in at the start of the month.


The highest prices on record for both petrol and diesel were other major factors.

The main upward price shifts over the 12 months to April:

• Natural gas - 95.5%
• Electricity - 53.5%
• Motor fuels - 31.4%
• Furniture and maintenance - 10.7%
• Restaurants and hotels - 8%
• Food and non-alcoholic drinks - 6.7%

The headline consumer prices index (CPI) measure had stood at 7% in March as the immediate effects of Russia's war in Ukraine filtered through to the likes of fuel forecourts.

It was on top of existing inflation caused by the easing of COVID-19 restrictions that saw demand widely outstripping supply across the global economy.

ONS chief economist Grant Fitzner said of the latest data: "Inflation rose steeply in April, driven by the sharp climb in electricity and gas prices as the higher price cap came into effect.

"Around three-quarters of the increase in the annual rate this month came from utility bills."

He added: "Steep annual rises in the cost of metals, chemicals and crude oil also continued, along with higher prices for goods leaving factory gates. This was driven by increases for food products, transport equipment and metals, machinery and equipment."

Rising factory gate prices are a strong indicator of inflation ahead and it emerged separately on Wednesday that fuel prices had hit new records over the previous 24 hours - at 167.64p a litre for petrol and 180.88p for diesel.

The AA said it meant that the chancellor's fuel duty cut had been wiped out in 55 days.

Gas and electricity costs continue to be the main worry ahead.

UK households were spared the worst of the jump in wholesale gas costs, first seen last summer, by the price cap mechanism as it is currently adjusted only twice a year - though that is soon about to change.

The average annual cost for gas and electricity under the cap rose by £693 on 1 April to £1,971 and is currently forecast to hit almost £2,600 in total at the next adjustment, due in October.

The Bank of England released updated forecasts earlier this month that inflation will top 10% later this year - with food prices set to provide greater upwards pressure due to crucial supplies of things like wheat being held up in war-torn Ukraine.

It has warned that the strain could result in a recession and surge in unemployment.

It would mark a fifth successive increase to tackle inflation expectations, worrying that wage rises to match the pace of price inflation will only make inflation more sticky in future.

The dire picture for the cost of living has left the chancellor under immense pressure to provide further relief to consumers and businesses.

Rishi Sunak said in response to the ONS data: "Countries around the world are dealing with rising inflation.

"Today's inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.

"We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.

"We're saving the average worker £330 a year through reducing National Insurance Contributions, changing Universal Credit to save over a million families around £1,000 a year, and providing millions of families with £350 each this year to help with their energy bills."

There was a predictable backlash from business groups, opposition parties and unions which have demanded urgent action from the Treasury as the pace of inflation has accelerated.

Rain Newton-Smith, the CBI's chief economist, said: "It is critical the government explores options to help people facing real hardship now, and support cashflow for vulnerable firms."

The Resolution Foundation - a think tank that focuses on living standards - claimed that inflation for the poorest households was already topping 10% as they spend a greater share of their income on energy.

Its senior economist, Jack Leslie, said: "Inflationary pressures are likely to continue to grow through the year as the effects of higher energy prices continue to work their way through businesses and into consumers' pockets.

"Nobody knows how long these pressures will last, or how workers will respond via higher wage demands, which is why the Bank faces a tough judgement on the pace and scale of interest rate rises.

"But one thing is certain - the government must provide further targeted support for those lower income families at the sharp end of this crisis."

https://news.sky.com/story/cost-of-living-crisis-inflation-hits-40-year-high-of-9-12615153
 
How the Ofgem and the Govt. failed to protect the consumers and bend over to the whims and facies of the big energy retailers!

 
The product of lockdowns destroying global supply chains

Alongwith anti China stance and energy crisis that will be exacerbated when they stop buying Russian oil and gas .

Covid Lockdown and zelensky cheerleaders will be regretting it by next winter when things get worse.
 
House prices are at risk of falling as a series of headwinds damage spending power, the outgoing boss of Nationwide Building Society has warned.

Joe Garner said higher property prices and interest rates, together with steep increases in the cost of living, meant that housing affordability had become even more challenging.

He made his remarks as the UK's biggest mutual reported a near-doubling of annual profits on the back of buoyant mortgage demand.

Pre-tax profits jumped to £1.6bn in the year to 4 April - up from £823m in the same period a year earlier.

But Mr Garner, who steps down as chief executive next month, said of the outlook: "The emergence of higher inflation, which has been exacerbated by the war in Ukraine, is likely to exert a significant drag on the economy in the near term.

"Higher inflation will place significant pressure on household budgets, especially for those on lower incomes who also accumulated fewer savings during COVID-related lockdowns.

He predicted that housing market activity would slow from elevated levels that has seen average prices increasing at a double-digit annual rate as demand from those wanting to move home exceeds the number of available properties.

Mr Garner leaves the helm of the country's second-largest mortgage lender on 1 June - to be succeeded by former TSB boss Debbie Crosbie.

Nationwide said its financial performance was boosted by a strong economic recovery from pandemic lockdowns.

It reported a £6.9bn jump in gross mortgage lending as it benefitted from the buoyant housing market which was supported by national government aid, including the now-ended stamp duty holiday for England and Northern Ireland.

https://news.sky.com/story/cost-of-...-at-risk-as-inflation-takes-its-toll-12617223
 
Average petrol prices have reached a new record high of 171.1p a litre, new figures show.

The average price for diesel reached 181.6p a litre on Thursday, according to data firm Experian Catalist - another record.
 
Boris Johnson has said a "big bazooka" of cost of living help will help struggling families get through bumpy times ahead.

The prime minister was speaking to reporters in Stockton, Teesside a day after a £15bn package of new measures was unveiled by Chancellor Rishi Sunak.

All households will see £400 cut from their energy bills while the poorest eight million will receive lump sum payments of £650, beefing up support announced earlier in the year including a £150 discount of most council tax bills.

Mr Johnson described the assistance, amounting to £1,200 for the least well-off households, as a "big bazooka".

He added: "I'm not going to pretend this is going to fix everything for everybody immediately. There are still going to be pressures.

"But it's a very very substantial commitment by the government to getting us through what will be I'm afraid still a bumpy time with the increase in energy prices around the world."

He said the measures will "get us through until I believe that prices will start to abate and we'll be in a much stronger position".

The measures will be part-funded by a tax levy on the bumper profits being enjoyed by oil and gas companies, which is expected to generate £5bn for the Treasury over the next year.

It comes at a time when soaring energy prices have pushed inflation to a 40-year high of 9% and after regulator Ofgem warned that gas and electricity household costs looked set to go up by a further £800 in the autumn.

Mr Johnson followed his Chancellor Rishi Sunak - who spoke to Sky News earlier - in playing down the risk that the support package could stimulate further inflation.

"We've looked at that very carefully and I think the answer to that is no because I don't think that it will lead necessarily to more discretionary spending simply because people's outgoings are going to go up and have been going up already as as result of the increased costs of energy and food," the PM said.

SKY
 
Average petrol prices have reached a new record high of 173.02p a litre, figures show, after an EU ban on Russian oil imports.

Fuel prices have been setting record highs every few days in recent weeks, as the supply dries up at a time when demand is starting to gain speed.

The average cost to fill a 55-litre family car with unleaded petrol is now £95.16, according to the RAC, with prices still likely to continue increasing.
 
Bank of England should look to increase base rate to ATLEAST 2.5% before the end of this year. Meaning Libor/Bank rates reach 4-5%. This is the bare minimum they need to do to keep inflation from going up.
 
If inflation is 9% then rates need to be above 9% to curb inflation.

These .5% rate increases do not prevent inflation and as such are known as nominal rises, rather than real rises.
 
Technics 1210 said:
If inflation is 9% then rates need to be above 9% to curb inflation.

These .5% rate increases do not prevent inflation and as such are known as nominal rises, rather than real rises.
Click to expand...

Technically you are very correct, but that will crash the UK economy forget a simple recession. I know plenty of businesses just surviving by simply servicing debt costs for now, the current negligible interest rates mean that they can afford to do so. Even worse imagine the fate of over leveraged home buyers once they come out of the fixed rate period. UK cannot afford Interest rates above 3%, both BoE and the Govt. know this.
 
shortbread said:
Technically you are very correct, but that will crash the UK economy forget a simple recession. I know plenty of businesses just surviving by simply servicing debt costs for now, the current negligible interest rates mean that they can afford to do so. Even worse imagine the fate of over leveraged home buyers once they come out of the fixed rate period. UK cannot afford Interest rates above 3%, both BoE and the Govt. know this.
Click to expand...

Indeed, and this is the challenge, the Western economies are drowning in debt, living hand to mouth, servicing debt. It’s a nightmare catch 22 situation.

What makes it worse is that the inflation we are seeing isn’t due to a rise in demand; it’s simply a case of commodity prices going through the roof.
 
shortbread said:
Technically you are very correct, but that will crash the UK economy forget a simple recession. I know plenty of businesses just surviving by simply servicing debt costs for now, the current negligible interest rates mean that they can afford to do so. Even worse imagine the fate of over leveraged home buyers once they come out of the fixed rate period. UK cannot afford Interest rates above 3%, both BoE and the Govt. know this.
Click to expand...

But what other mechanisms can they employ other than interest rate hike. This is surely driven by years of QE.

So, the other option is quantitative tightening to bring back the amount of money held in reserver to pre pandemic level. But as per the current BoE plan, it would take till 2031. Even this coupled with gradual interest rate hike might be too slow.

I reckon interest rates will need to go to pre 2008 levels if we are to see any chance of inflation stabilising.
 
Sidilicious said:
But what other mechanisms can they employ other than interest rate hike. This is surely driven by years of QE.
Click to expand...

Yes it is and the sensible solution is for the BoE to manage an 'engineered recession'. Rather than fall into recession face first, tame it to it's own terms. But looking at the calibre of the current BoE flock, they simply do not have the expertise to do it. The genius who heads it came up with the 'do not ask for a pay rise statement'!

Other negligible acts would be to lower VAT to cool prices, but it risks an increase in demand and also retailers hiking prices and taking advantage.
 
Thousands of airline passengers are facing fresh disruption as widespread flight cancellations continue - with travel agents inundated with calls from customers worried the chaos will carry on and ruin their summer holidays.

EasyJet cancelled at least 35 flights on Tuesday, with Gatwick the worst affected airport, while Hungarian carrier Wizz Air axed at least seven flights due to serve UK airports.
 
£100 to fill up family car 'by tomorrow' as diesel and petrol price surge continues

In what has become a daily occurrence in recent times, we have just received news of yet another significant leap in diesel and petrol prices.

Data from the RAC shows the average price of both forms of fuel rose by more than 1p per litre in just 24 hours.

The average litre of petrol cost is now 180.73p and for diesel it is 186.57p.

The rate of the increases means yet another milestone is expected by the RAC tomorrow - £100 to fill-up the average family car with petrol.

It is currently £99.40 for a petrol car and £102.61 for diesel.
 
The average cost of filling a typical family car with petrol has surpassed £100 for the first time, the RAC has said.

The situation is likely to worsen the cost of living crisis for motorists and for customers, as businesses will at some point look to pass on their rising costs.
 
I gave a meter reading after a while and made the grave error to not have done so before April. Worse, they tried to be sneaky and charge me on the new tariff for under estimations before the hike. Need to stay on top of the readings moving forward but what a shambles, can’t imagine how others must be doing, I am fortunate to have saved my neck due to a mini rainy day pot.

Need to look into fixed tariff to and whether or not this is worth it, the gas rate is so unstable
 
shaz619 said:
I gave a meter reading after a while and made the grave error to not have done so before April. Worse, they tried to be sneaky and charge me on the new tariff for under estimations before the hike. Need to stay on top of the readings moving forward but what a shambles, can’t imagine how others must be doing, I am fortunate to have saved my neck due to a mini rainy day pot.

Need to look into fixed tariff to and whether or not this is worth it, the gas rate is so unstable
Click to expand...

Fixed tariff is a fraud scheme bro

They will send you a bulk payment bill of £1-2k at the end of the year. Give meter readings every month and stay on top with these sneaky companies
 
£2.30 for a litre of diesal today in GULF petrol pump , Chelsea. When will this stop, will prices ever go back down?
 
I find myself driving less nowadays and only making truly essential journeys, to the office etc, because I roll past the petrol stations and see the prices & I don’t want to have to buy even one more litre of unleaded.

Last time I filled up my Hyundai (which is a bit chunky, needs to fit the kids inside — but has a very modest engine), it was the best part of £100 to do so; and I know it will be more next time.
 
This is the cost of your COVID lockdowns and overreaction to a virus with a fatality rate of 0.3%. This is only just the beginning and it will take the world years to recover and may even kill more people through hunger and poverty than that virus actually killed.
 
Look on the flip side, if you have private company pensions, then your pension pot will benefit through higher dividends from energy companies in the UK.

There's a reason why FTSE 100 is shy of an all-time high while markets are in decline worldwide.
 
Technics 1210 said:
Look on the flip side, if you have private company pensions, then your pension pot will benefit through higher dividends from energy companies in the UK.

There's a reason why FTSE 100 is shy of an all-time high while markets are in decline worldwide.
Click to expand...

Not when they've windfall taxed them!
 
Rana said:
Fixed tariff is a fraud scheme bro

They will send you a bulk payment bill of £1-2k at the end of the year. Give meter readings every month and stay on top with these sneaky companies
Click to expand...

Nice one bro, I had suspected the same but never explored whether it was a good idea. It seems changing supplier may not have much of an impact at this point. Also important to consider which meter you have
 
<b>Fuel prices: Petrol stations face urgent review of fuel duty cut</b>

The UK's competition watchdog has been asked to conduct an urgent review into whether a 5p fuel duty cut is being passed on quickly enough to drivers.

Business Secretary Kwasi Kwarteng has urged the Competition and Markets Authority (CMA) to examine the fuel market and whether there are local variations in petrol and diesel prices.

The cost of filling an average family car has now hit a record £100.

It comes as the CBI warned households will go into recession later this year.

The Petrol Retailers Association, which represents independent fuel retailers, said it "welcomed transparency regarding fuel pricing" and would co-operate with the CMA's investigation.

Pump prices have been rising since Russia's invasion of Ukraine in February led to oil supply fears.

Last week, the RAC motoring organisation said the cost of filling a 55-litre tank reached £100.27 for petrol and £103.43 for diesel.

In a letter to the CMA, Mr Kwarteng said that despite introducing a fuel duty cut "there remains widespread concern about the pace of the increase in prices at the forecourt and, that prices may not fall as much or as fast as they rise".

As well as looking at whether the duty cut is being passed on to consumers, Mr Kwarteng has also asked the CMA to examine "whether the retail fuel market has adversely affected consumer interests".

This will include investigating whether there are price variations for petrol and diesel at local forecourts.

"Drivers should be getting a fair deal for fuel across the UK," said Mr Kwarteng. "Healthy competition between forecourts is key to achieving this, with competition working to keep pressure on prices."

He has asked for the CMA to report back to him by 7 July.

The Petrol Retailers Association says its members passed on the 5p fuel duty cut after it was announced in March, but wholesale fuel prices have continued to rise since then.

That and other pressures have left retailers "operating on extremely tight margins", it says.

Boss Gordon Balmer said the association had requested several meetings with Mr Kwarteng "to explain how the fuel market works" but had not heard back.

"Our members have had to endure several [unfair] headlines in the press," he added.

"Therefore, the news that the minister has contacted the CMA to conduct an urgent review of the fuel market is timely."

Jack Cousens, head of roads policy at the AA, said while the group welcomed the review, "more urgent action is needed".

"To relieve pressure at the pumps we need an immediate 10p cut to fuel duty. That would help restore some balance ahead of the initial CMA findings due in early July."

Northern Ireland Secretary Brandon Lewis told the BBC:

“Once we get the review of that then it will be right to look at what more, if we need to, we can do to help people to make sure it's actually getting to where we want to see that support."

Labour said it had been calling for a CMA investigation into pump prices for some time.

Setting out measures to tackle the rising cost of living, shadow chancellor Rachel Reeves told Times Radio:

“We know that the market for petrol and diesel is not working properly, and even when the government reduced duty back in March it was not passed onto consumers."

The Liberal Democrats urged the government to cut fuel duty in rural areas to help families bearing the brunt of record petrol prices.

Analysis of official figures by the party suggests households in rural areas pay £114 a week on transport costs, almost £40 more than those in urban areas.

The rate of Inflation - or the cost of living - rose to a 40-year high of 9% in April, with higher energy bills and fuel prices contributing to the increase.

The head of the UK's largest business group warned on Sunday that households will go into recession later this year as people cut spending to combat rising living costs.

Tony Danker, director-general of the CBI, forecast that spending on the High Street and on discretionary items will "go negative" and that Britons were already "trading down".

"It is a well-known behaviour when there's high inflation," Mr Danker told the BBC's Sunday Morning programme. "They're not buying as many discretionary goods or they're buying the cheaper option in the supermarkets."

The Organisation for Economic Co-operation and Development has forecast that while the UK will grow by 3.6%, the economy will stagnate at 0% growth in 2023.

It will mean the UK will go from the second-fastest growing economy in the G7 group of industrial nations to the slowest.

Mr Danker said: "The only real thing stopping us from having a full-blown recession this year is that at the moment business investment levels are quite high."

A recession is defined as the economy getting smaller for two consecutive quarters.
We
He said: "The risk is if business investment starts to fall then the whole country could go into recession sooner than some are predicting, ie next year so I think that's why at the moment there's not a lot you can do about household spending when inflation is this high but you do need to stabilise confidence among firms so they don't stop spending too."

https://www.bbc.co.uk/news/business-61775349
 
James said:
<b>Fuel prices: Petrol stations face urgent review of fuel duty cut</b>

The UK's competition watchdog has been asked to conduct an urgent review into whether a 5p fuel duty cut is being passed on quickly enough to drivers.

Business Secretary Kwasi Kwarteng has urged the Competition and Markets Authority (CMA) to examine the fuel market and whether there are local variations in petrol and diesel prices.

The cost of filling an average family car has now hit a record £100.

It comes as the CBI warned households will go into recession later this year.

The Petrol Retailers Association, which represents independent fuel retailers, said it "welcomed transparency regarding fuel pricing" and would co-operate with the CMA's investigation.

Pump prices have been rising since Russia's invasion of Ukraine in February led to oil supply fears.

Last week, the RAC motoring organisation said the cost of filling a 55-litre tank reached £100.27 for petrol and £103.43 for diesel.

In a letter to the CMA, Mr Kwarteng said that despite introducing a fuel duty cut "there remains widespread concern about the pace of the increase in prices at the forecourt and, that prices may not fall as much or as fast as they rise".

As well as looking at whether the duty cut is being passed on to consumers, Mr Kwarteng has also asked the CMA to examine "whether the retail fuel market has adversely affected consumer interests".

This will include investigating whether there are price variations for petrol and diesel at local forecourts.

"Drivers should be getting a fair deal for fuel across the UK," said Mr Kwarteng. "Healthy competition between forecourts is key to achieving this, with competition working to keep pressure on prices."

He has asked for the CMA to report back to him by 7 July.

The Petrol Retailers Association says its members passed on the 5p fuel duty cut after it was announced in March, but wholesale fuel prices have continued to rise since then.

That and other pressures have left retailers "operating on extremely tight margins", it says.

Boss Gordon Balmer said the association had requested several meetings with Mr Kwarteng "to explain how the fuel market works" but had not heard back.

"Our members have had to endure several [unfair] headlines in the press," he added.

"Therefore, the news that the minister has contacted the CMA to conduct an urgent review of the fuel market is timely."

Jack Cousens, head of roads policy at the AA, said while the group welcomed the review, "more urgent action is needed".

"To relieve pressure at the pumps we need an immediate 10p cut to fuel duty. That would help restore some balance ahead of the initial CMA findings due in early July."

Northern Ireland Secretary Brandon Lewis told the BBC:

“Once we get the review of that then it will be right to look at what more, if we need to, we can do to help people to make sure it's actually getting to where we want to see that support."

Labour said it had been calling for a CMA investigation into pump prices for some time.

Setting out measures to tackle the rising cost of living, shadow chancellor Rachel Reeves told Times Radio:

“We know that the market for petrol and diesel is not working properly, and even when the government reduced duty back in March it was not passed onto consumers."

The Liberal Democrats urged the government to cut fuel duty in rural areas to help families bearing the brunt of record petrol prices.

Analysis of official figures by the party suggests households in rural areas pay £114 a week on transport costs, almost £40 more than those in urban areas.

The rate of Inflation - or the cost of living - rose to a 40-year high of 9% in April, with higher energy bills and fuel prices contributing to the increase.

The head of the UK's largest business group warned on Sunday that households will go into recession later this year as people cut spending to combat rising living costs.

Tony Danker, director-general of the CBI, forecast that spending on the High Street and on discretionary items will "go negative" and that Britons were already "trading down".

"It is a well-known behaviour when there's high inflation," Mr Danker told the BBC's Sunday Morning programme. "They're not buying as many discretionary goods or they're buying the cheaper option in the supermarkets."

The Organisation for Economic Co-operation and Development has forecast that while the UK will grow by 3.6%, the economy will stagnate at 0% growth in 2023.

It will mean the UK will go from the second-fastest growing economy in the G7 group of industrial nations to the slowest.

Mr Danker said: "The only real thing stopping us from having a full-blown recession this year is that at the moment business investment levels are quite high."

A recession is defined as the economy getting smaller for two consecutive quarters.
We
He said: "The risk is if business investment starts to fall then the whole country could go into recession sooner than some are predicting, ie next year so I think that's why at the moment there's not a lot you can do about household spending when inflation is this high but you do need to stabilise confidence among firms so they don't stop spending too."

https://www.bbc.co.uk/news/business-61775349
Click to expand...

This is such a red herring and in fact a cynical attempt to fool the public.

The fuel duty was cut by just 5p. Since then, the price of petrol has risen 30-60p, depending where you buy your fuel. Therefore, whether the cut was passed on or not is almost irrelevant, because the increase in fuel costs is many, many times the tiny cut in fuel duty.

The cost of fuel is rising for many reasons, including for example the fact that Brexit has caused a weak pound and fuel is bought in dollars.

I honestly do not understand the messed up economic policy of this government. We are experiencing a period of rampant inflation. That is, in large part, caused by insane fuel costs which, in turn, is causing the prices of everything to rise (because everything we buy is transported to us in trucks etc). Therefore, to deal with inflation, the biggest thing the Chancellor could do is announce a big cut in fuel duty - not 5p, but a drastic cut - e.g. cut the 50%ish tax on fuel. That would drastically cut the cost of fuel and therefore the cost of everything else.

Instead this government is tackling the rising cost of living by giving people huge cash handouts - some people will be £1,200 is cash handouts. Some of that is not even means tested. So the government is pumping more and more money into the economy, thereby driving prices up more and more. Has the Chancellor gone crazy???
 
<b>UK interest rates raised to 1.25% by Bank of England</b>

UK interest rates have risen further as the Bank of England attempts to stem the pace of soaring prices.

Rates have increased from 1% to 1.25%, the fifth consecutive rise, pushing them to the highest level in 13 years.

It comes as finances are being squeezed by the rising cost of living, driven by record fuel and energy prices.

Inflation - the rate at which prices rise - is currently at a 40-year high of 9%, and the Bank warned it could surpass 11% later this year.

How high could interest rates go?

The Bank said rising energy prices were expected to drive living costs even higher in October, but added it would "act forcefully" if necessary should inflation pressures persist.

Capital Economics speculates that the Bank could eventually have to raise interest rates to 3%.

One way to try to control rising prices - or inflation - is to raise interest rates. This increases the cost of borrowing and encourages people to borrow and spend less. Higher interest rates also motivate people to save more.

The June rate rise means that homeowners with a typical tracker mortgage will have to pay about £25 more a month. Those on standard variable rate mortgages will see a £16 increase.

Compared with pre-December 2021 - when the Bank announced the first in this series of rate rises - tracker mortgage customers are paying around £115 more a month, and variable mortgage holders about £73 more.

However, about three-quarters of mortgage-holders have a fixed-rate deal, so have not been affected immediately.

Meanwhile, some businesses believe rising borrowing costs may curb customer spending.

"At the moment we're not seeing it directly but we know we are a luxury," Julie Dalton, managing director of Gulliver's Theme Park Resorts told the BBC.

"Past experience has told us when interest rates go up we do start to suffer."

Six of the nine members of the Bank's Monetary Policy Committee voted to raise rates to 1.25%, but three backed a bigger increase to 1.5%.

Minutes from the Bank's meeting also reveal that it expects the UK economy will shrink by 0.3% in the April-to-June period.

https://www.bbc.co.uk/news/business-61801362
 
James said:
They should have gone straight for the 1.5% IMO.
Click to expand...

It will be too difficult for some homeowners. Many bought their properties with 0% a few years ago. 1.5% will see a large rise in payments.

Its a sad state of affairs for people wanting to start a family, have a house etc but are in the lower wage bracket.

I dont have this issue but feel for others esp with house prices rising in the last decade.

I think we will see interest rates reaching near 4% within in 18 months. Ideally interest rates should match inflation to steady the economy but this would be a disaster to homeowners but a blessing for those saving, even though sterling is becoming weaker and weaker.
 
KingKhanWC said:
It will be too difficult for some homeowners. Many bought their properties with 0% a few years ago. 1.5% will see a large rise in payments.

Its a sad state of affairs for people wanting to start a family, have a house etc but are in the lower wage bracket.

I dont have this issue but feel for others esp with house prices rising in the last decade.

I think we will see interest rates reaching near 4% within in 18 months. Ideally interest rates should match inflation to steady the economy but this would be a disaster to homeowners but a blessing for those saving, even though sterling is becoming weaker and weaker.
Click to expand...

Totally, feel for those people. It will be harder for first time buyer’s especially, there is literally no genuine incentive to help them. During the pandemic we kept the property market going by encouraging those looking to save stamp duty on a second or third property etc

If am being optimistic, shouldn’t the rate come down in the next 24 months? as in theory, raising the interest rate and encouraging less borrowing / spending etc ought to bring inflation down.

Is it possible to extend the fixed term for an agreed mortgage rate ? or one of those where we will have to bite the bullet unfortunately
 
Britons cannot expect pay rises to keep up with the soaring cost of living, the government has warned.

Treasury Chief Secretary Simon Clarke has said matching salaries to inflation risked causing prices in the shops to surge even higher.

His intervention comes as more than 40,000 staff prepare for a three-day strike that will cripple large swathes of the UK's train network.

The RMT union has said it is "unacceptable for railway workers to either lose their jobs or face another year of a pay freeze" when inflation is at a 40-year high.

And in other developments, tens of thousands of people are expected to march on Saturday - calling on the government to do more to tackle the cost-of-living crisis.

The protest has been organised by the TUC union, which claims workers have lost almost £20,000 since 2008 because pay has not kept up with inflation.

Mr Clarke was quoted by The Daily Telegraph as warning that Britons cannot have "unrealistic expectations around pay" - adding steep wage increases would exacerbate the crisis.

He told the newspaper: "We have to be very careful at this point about preventing inflation from becoming a self-fulfilling prophecy."

Teachers are reportedly planning to march en masse to demand better pay and conditions.

Their union, the NASUWT, said teachers were at the sharp end of the cost-of-living crisis, with essential living expenses surging ahead of wages and the value of their pay plummeting by 19% over the past 12 years.

Eight million households will start receiving cost-of-living payments from 14 July. Low-income households on benefits will get £326 next month as part of a £21bn support package to help with soaring bills, which was announced by the government last month.

SKY
 
Thousands of people have marched in central London demanding more action from the government over the rising cost of living.

The march in central London came as the country braces for major rail strikes next week, after talks failed to resolve a dispute over pay, job cuts and workers' conditions.

Beginning in Portland Place, the protesters walked to Parliament Square for a rally organised by the TUC.

Banners read "end fuel poverty, insulate homes now", "nurses not nukes" and "cut war not welfare".

Songs including I Need A Dollar and Money Money Money were played through loud speakers.

The TUC said its research showed some workers had lost almost £20,000 since 2008 because pay has not kept pace with inflation.

Yvonne Thomas, a social care worker, told Sky News: "Sometimes you look at your gas and electric and you're starting to cry, because you don't know which one to top up first.

"You have to be working 50, 60 hours so you're able to meet your bills and pay your rent. This is not acceptable in the 21st century."

People gathered for a rally in Parliament Square
Unison members and members of the public gather on Portland Place ahead of a TUC national demonstration in central London to demand action on the cost of living, a new deal for working people and a pay rise for all workers. Picture date: Saturday June 18, 2022.

Teacher Frankie Brown, 24, said: "Every day I have got kids in my class who are going home to homes where they don't have enough to eat."

Matthew Searles, a paramedic with the London Ambulance Service, told Sky News he never imagined that in mid-life he would have to think about what food to buy. His current financial situation makes him feel like a student again, he added.

Frances O'Grady, TUC general secretary, said it was time to "raise taxes on wealth not workers".

She added: "What about bankers' bonuses? What about the boardroom raking it in? What about corporate profits?"

Boris Johnson has said Britain will get through the cost of living crisis and "come through on the other side strongly".

Speaking after returning from a trip to Kyiv, the prime minister added: "I sympathise very much with everybody who is facing pressures caused by the cost of living. We will get through it."

He also rejected a suggestion that a £21bn package announced last month by Chancellor Rishi Sunak - including a £400 discount on energy bills for all - would potentially raise inflation.

"We don't believe that this support is inflationary," Mr Johnson said.

Largest rail strikes in decades

The action by tens of thousands of rail workers will cripple services for most of the week. People have been advised to avoid travelling unless necessary.

Strikes at Network Rail and 13 train operators will go ahead on Tuesday, Thursday and next Saturday, and on London Underground on Tuesday.

Union leaders have said: "We believe it will go to people who need it. We think it is completely the right thing to do."

A Department for Transport spokesperson said: "Strikes should always be the last resort, not the first, so it is hugely disappointing and premature that the RMT is going ahead with industrial action.

SKY
 
What fuel prices are now - and how they have changed over recent years

As reported here earlier (see 10.22 post), petrol stations have so far failed to pass on to drivers the recent fall in wholesale costs.

It means prices have hit new records, and currently stand as follows:

Latest average cost of a litre of petrol: 191.1p

Latest average cost of a litre of diesel: 198.9p

Daily price rise in petrol: 0.1p

Daily price rise in diesel: -0.2p (fall of 0.2p)

Weekly price rise in petrol: 2.3p

Weekly price rise in diesel: 2.6p
 
KingKhanWC said:
I think we will see interest rates reaching near 4% within in 18 months. Ideally interest rates should match inflation to steady the economy but this would be a disaster to homeowners but a blessing for those saving, even though sterling is becoming weaker and weaker.
Click to expand...

I think it will be a lot sooner than 18 months.

The rate rises will allow controlled deflation to the house price bubble, this is much needed now. A steady cooling of house prices rather than a pop. Albeit it's true that people who purchased recently at the peak (especially those on 2 year fixed rates) will be staring at negative equity and higher monthly payments.
 
The pound is heading for its biggest six-month drop against the US dollar since 2016, the year of the Brexit referendum.

Sterling had fallen 0.46% to $1.2127 by mid-afternoon on Wednesday, its lowest level since 16 June, when the Bank of England raised its key policy rate by 25 basis points to 1.25%.

The pound has fallen more than 10% against the dollar this year, its performance hampered by fears of a major economic slowdown, surging inflation, and growing uncertainty about the consequences of Brexit.

Also on Wednesday, Swati Dhingra, who will become a Bank of England policy-maker in August, said there is room for a gradual approach to raising interest rates.

The bank has raised interest rates five times since December, mostly by a quarter of a point each time, in an effort to fight inflation.

But inflation hit a 40-year high of 9.1% in May and some of the bank's policymakers say the rate rises should have been bigger.

Ms Dhingra, an associate professor at the London School of Economics, will succeed one of those policymakers.

Speaking before a parliamentary committee scrutinising her appointment, she said she might have supported a half-point rise at this month's meeting but now thought that would have been a mistake.

She said: "In hindsight, I think that maybe there is some room for a very gradual approach here.

"Newer data is starting to show that possibly a slowdown has become much more imminent than we thought before."

City Index analyst Fawad Razaqzada told Reuters: "The pound continues to be sold as worries about a sharp economic slowdown outweigh risks of runaway inflation.

"This has given rise to expectations that the BoE will front load rate hikes, before stopping and potentially reversing the rate increases."

He said Ms Dhingra had "gone one step further by saying that the central bank will need to tighten its belt very gradually going forward".

'Economy beginning to slow'

Meanwhile, Bank of England Governor Andrew Bailey said it is "very clear" the economy is beginning to slow, adding that the bank will not necessarily have to act "forcefully" to control inflation.

He told a European Central Bank event in Portugal: "There will be circumstances in which we will have to do more.

"We're not there yet in terms of the next meeting.

"We're still a month away, but that's on the table.

"But you shouldn't assume its the only thing on the table, that's the key point," he added.

SKY
 
Twelve people have been arrested after protesters used "rolling roadblocks" to bring parts of the M4 to a standstill during demonstrations over high fuel prices.

Demonstrations took place on the motorway at the border between England and Wales and on the M5.

Groups of motorists took part in "slow-downs", occupying all three lanes and dropping their speed to back up traffic behind them.

SKY
 
Print money out of thin air, hand out money to rich people. Through them inflate housing and stock prices. As a result people are forced to borrow up to their eye balls to afford a place to live, then raise interest rates and collect interest on money they printed out of nothing.

Most people practically own nothing and buy their tvs, cars, phones, home improvements etc on some financial plan.

Then we have the opportunist companies who offer renewed financing at higher premiums putting people who are already in despair into even more debt. Just a tragic state of affairs.
 
The pound has fallen to a two-year low against the dollar reflecting traders' increasing concerns about recession around the world as energy prices continue to soar.

But sterling is also weak because markets are worried about future UK economic growth, analysts said.

Sterling could fall even further after predictions of economic stagnation and as inflation rises, they added.

London shares regained some ground on Wednesday following Tuesday's falls.
 
Wrong.

Markets are now concerned about UK leadership hence an accelerated drop in confidence of the GBP.

No new economical data has come to light of late, MSM is just spinning yarns.
 
Typical domestic energy bills could hit more than <b>£3,300 a year</b> this winter, according to the latest forecasts.

Consultancy Cornwall Insight said the typical gas and electricity bill in England, Wales and Scotland could reach £3,363 in the new year.

The prediction comes as suppliers and consumer groups agreed a plan that could lead to a dedicated hotline and debt support for struggling households.

A set of government payments to help with bills starts to be paid next week.

However, there were calls for the government to do more to support families during the coming winter.

Cornwall Insight said that the typical domestic customer was likely to pay £3,244 a year from October, then £3,363 a year from January. The typical bill at present is about £2,000 a year.

Dr Craig Lowrey, principal consultant, said: "There is always some hope that the market will stabilise and retreat in time for the setting of the January [price] cap.

"However, with the announcement of the October cap only a month away, the high wholesale prices are already being baked in to the figure, with little hope of relief from the predicted high energy bills."

Earlier this week, a meeting was held between a host of energy companies - including British Gas, the UK's largest supplier - and consumer groups.

They agreed to explore various proposals including:
• The introduction of a priority call line to ensure people receive all the help to which they are entitled
• Appeals to shift the burden of bills away from the standing charge
• An agreement for a blueprint on how to deal with customers who cannot pay their bill
• A new universal tool to outline what assistance is available for people in certain circumstances

The group also agreed to provide clear information about who should read their meter and when in the build up to bills rising in October. Last time bills for millions of people changed, there were widespread problems as suppliers' online tools were unable to cope with demand.

Martin Lewis, founder of Money Saving Expert, who called the meeting, said: "Far more is needed, and that must come from a functioning government.

"This winter will be catastrophic, the hideous spikes in wholesale energy will translate by October into [regulator] Ofgem setting a price cap for a typical bill of around £3,000 a year - close to four times what some paid just two years go. It will push millions into poverty."

Earlier this week, documents seen by the BBC showed how households were likely to pay at least £3,000 a year from October.

The energy price cap, which applies in England, Wales and Scotland, sets a limit on the amount that can be paid for each unit of energy.

While the official figure is due to be announced next month by Ofgem, the period over which it is assessed is now almost complete.

Bills had already risen by £700 on average in April, with a further squeeze on incomes from the rising cost of living, as inflation hit 9.1% - the highest in 40 years.

Rising wholesale energy prices, paid by suppliers, have been driven by volumes of Russian gas exports going down, the closure of a key gas export facility in the USA, and a fall in the value of the pound.

https://www.bbc.co.uk/news/business-62094435
 
Brits deserve every struggle coming their way.

The most idiotic of populations choosing dumb leaders and blindly supporting wars abroad.

Remember Europe has jack all natural resources, its wealth is based on centuries of looting of others. This isnt the 1800's, teh world has changed. Unless you become friendly with all, treat all with fairness, they will have enough of your world order and change it. :putin
 
The energy price cap is now expected to double in January, hitting £3,850 per year, according to experts.

BFY Group, a utilities consultancy, said households could see energy bills of £500 for the month of January alone.

The cap is forecast to rise to £3,420 in October - a much higher sum than the £2,800 predicted in May by Ofgem, the energy regulator.

Households are already paying £1,971 per year for energy bills after the price cap was increased in April - this would amount to a 74% increase in the autumn.
 
BoE finally grows a pair and hikes rate by 0.5%. Actually they boxed themselves to a corner after being really behind on QT. They need to continue tightening atleast till the first quarter of next year.

'The Bank has also raised its inflation forecast to 13% and now predicts the UK will fall into recession in the last three months of this year.'
 
Last edited:
The UK economy will be plunged into recession for more than a year this autumn as rising energy prices push inflation above 13%, the Bank of England has warned.

In a bleak outlook for consumers and business, the Bank forecast five quarters of economic contraction and a 5% fall in real-terms living standards, and increased interest rates by 0.5 percentage points, the largest single rise in 28 years.

SKY
 
Great news, rates need to be higher, though unsurprisingly Banks are not increasing savers rates, but of course they are increasing mortgage rates.

Total scam.
 
Petrol prices starting to go down. Seen some low £1.70s and high £1.60s for unleaded today.
 
<b>Cost of filling a tank falls by £5 in July</b>

The price of petrol fell in July, knocking nearly £5 off the cost of filling a tank, according to the RAC.

Average petrol prices dropped by nearly 9p over the month to 182.69p per litre, while diesel fell by almost 7p to 192.38p per litre.

But the motoring group warned the reductions still don't fairly reflect the fall in the wholesale price of fuel.

It said major retailers should be cutting pump prices much further.

Fuel prices have soared in recent months, driven by the war in Ukraine and moves to reduce Europe's dependence on oil from Russia, a major supplier.

With food and energy bills also surging, many households are feeling financial strain.

Wholesale petrol prices peaked at the start of June, but have since fallen as the price of oil has dropped back.

Fears of a recession in the US and elsewhere have hit demand for oil, and the price of Brent crude - the international benchmark for oil - has fallen to around $100 a barrel, after soaring when Russia invaded Ukraine.

The RAC said nearly £5 was shaved off the cost of a 55-litre tank of petrol in July, from £105.29 down to £100.48, as retailers lowered their prices.

The cost of filling up a diesel tank dropped by £3.68 over the month.

These are the third and fourth biggest monthly reductions, respectively, in the last 20 years.

However, the RAC says the falls are still too slow, given the significant reductions in the wholesale price of fuel.

Wholesale petrol prices have fallen by 20p over the last eight weeks, whereas the average price paid for unleaded by drivers has only dropped by 9p in July.

Based on average wholesale prices last week, the RAC says petrol should be around 167p per litre, not 183p.

It warned that the failure of major retailers to slash petrol pump prices in line with the fall in wholesale costs of unleaded is costing drivers, who are paying nearly £9 a tank more than they should be.

RAC fuel spokesman Simon Williams said the biggest retailers should have "cut their prices more significantly on a daily basis", given the steady and consistent fall in the wholesale price of petrol.

He said their unwillingness to do this made July "an unnecessarily tough month for drivers".

However, some fuel analysts argue that is not a fair comparison.

"Over the last eight weeks, prices have jumped around; it's understandable if retailers have tried to smooth those differences out in their prices," said Steve Irwin, director at Portland Analytics.

"There is often a lag between wholesale prices dropping and a drop in prices at the pump. I expect we will see further price drops in petrol in forecourts over the next week or so of a further 5, 6 or even 7p a litre."

While the drop in petrol prices is good news for drivers, Mr Irwin warned it is not necessarily a good sign for the economy.

"The market is clearly worried about a downturn, with people cutting back this autumn and winter, and that is being factored into the wholesale price," he said.

"If signs of that downturn don't materialise, prices may go back up again. If the market thinks they are, they could fall further."

https://www.bbc.co.uk/news/business-62399836.amp
 
Energy bills are expected to rise even further this winter than previously forecast, according to the latest from energy consultancy Cornwall Insight.

Bills are now expected to reach approximately £3,582 a year for the average household from October - up from the £3,359 predicted earlier this month.
 
Seeing this now, and Martin paints a scary picture. The Govt. needs to intervene, but will most probably chicken out by offering something to the lowest bracket and term it, 'we're doing more for the needy'!

 
This winter is a disaster waiting to happen. Energy bills now predicted to easily exceed £4k and reach £4.2k on average.

Asian households are typically bigger than average, so expect many Pakistanis to be facing energy bills significantly in excess of this insane average.

I’m afraid this is now at levels that will plunge 10s of millions of people into crisis. Government intervention is a necessity right now. But we have a Conservative Party vanity contest on at the moment, which is clearly more important.
 
Conservative Party leadership contest is completely pointless and utterly boring, the winner is a foregone conclusion, and it should be ended early with the ballots to date counted. Get Boris out by the weekend and a new PM next week (Truss) and let’s see some proper Government action on the cost of living. These two amendments to the energy cap which are just around the corner are a cruel joke and they must be stopped.
 
Weren't we told by bojo that uk would become the Saudi Arabia of windpower?

Maybe the wind will start blowing in winter and create lodes of electricity to light and heat people's homes because that's what the tree huggers , Chris packham and Bill oddie told us
 
mazkhan said:
Weren't we told by bojo that uk would become the Saudi Arabia of windpower?

Maybe the wind will start blowing in winter and create lodes of electricity to light and heat people's homes because that's what the tree huggers , Chris packham and Bill oddie told us
Click to expand...

The lies is green energy will replace 'fossil' energy. A complete outright lie.
 
Usman said:
This winter is a disaster waiting to happen. Energy bills now predicted to easily exceed £4k and reach £4.2k on average.

Asian households are typically bigger than average, so expect many Pakistanis to be facing energy bills significantly in excess of this insane average.

I’m afraid this is now at levels that will plunge 10s of millions of people into crisis. Government intervention is a necessity right now. But we have a Conservative Party vanity contest on at the moment, which is clearly more important.
Click to expand...

I predict riots across Europe I'm nor talking protests I actually fear there will be mass violence and looting and total carnage if the UK and eu don't get a handle on this there's a real chance people starving and freezing to death in Europe this year due to the energy crisis.

How they expect an average household to fork out 4-5 bags a year for energy , its total madness to expect people to pay 5 times more than what was last year.
 
mazkhan said:
I predict riots across Europe I'm nor talking protests I actually fear there will be mass violence and looting and total carnage if the UK and eu don't get a handle on this there's a real chance people starving and freezing to death in Europe this year due to the energy crisis.

How they expect an average household to fork out 4-5 bags a year for energy , its total madness to expect people to pay 5 times more than what was last year.
Click to expand...

There’s a growing movement of people who are simply going to cancel their direct debits come 1 October. That might not sound as extreme as the rioting you are describing, but what the heck is the government going to do when that happens?

What if enough people refuse to pay? The government will be forced to bail out the energy companies, at cost of many, many billions of pounds - much more than providing support for people right now.

The paralysis of government over this period is just unforgivable. The Tories will live to regret this.
 
Workers have suffered a record real-term pay slump in the face of soaring prices, official data reveals.

Regular wages, excluding bonuses, plunged an average of 4.1% on the year in the three months to June when inflation is taken into account, according to the Office for National Statistics (ONS).

It is the ninth consecutive month-on-month drop in real-term pay, the figures show.

It comes after the rate of consumer price index (CPI) inflation hit a 40-year record of 9.4% in June and is expected to reach as high as 11% later this year.

Bills have surged due to soaring energy and fuel bills amid the impact of the Ukraine war, but many have seen wages struggle to keep up.

The worsening picture on pay will ramp up pressure on the government to take further action to tackle the cost of living crisis.

The data also showed the number of UK workers on payrolls rose by 73,000 between June and July to 29.7 million.
 
Britain's rate of inflation has surged to a fresh 40-year high, heaping yet more pain on cash-strapped households as the cost of living crisis deepens.

The Consumer Prices Index (CPI) rose to 10.1% in the 12 months to July, up from 9.4% in June and remaining at the highest level since February 1982, the Office for National Statistics (ONS) said.
 
MenInG said:
Britain's rate of inflation has surged to a fresh 40-year high, heaping yet more pain on cash-strapped households as the cost of living crisis deepens.

The Consumer Prices Index (CPI) rose to 10.1% in the 12 months to July, up from 9.4% in June and remaining at the highest level since February 1982, the Office for National Statistics (ONS) said.
Click to expand...

BBC:
Soaring living costs are eating into household budgets, with prices rising faster than wages.

The Bank of England has said inflation could peak at more than 13% this year.

Energy, petrol and diesel costs are also contributing to inflation.

But food and non-alcoholic drinks were the largest contributor to rising prices in July, according to the ONS.

The price of bread, cereals, milk, cheese and eggs rose the fastest, while the cost of vegetables, meat and chocolate were also higher.

Prices also rose for other staples, such as toilet rolls, pet food and toothbrushes.

Transport costs were another big contributing factor, with air fares and international rail tickets particularly increasing.

The price for package holidays also went up, as demand increased.
 
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