Energy bills to top £5,000 next year in new shock to households - live updates




  • In Business
  • 2022-08-11 08:48:10Z
  • By The Telegraph
Energy bill - Jacob King/PA Wire
Energy bill - Jacob King/PA Wire  
  • Wildcat strikes spread across Britain as thousands of workers stage unofficial walkouts over pay

  • Energy prices cap could hit grim milestone of £5,000

  • FTSE 100 flat

  • UK house prices will continue to rise in coming year, says RICS

  • Nasdaq surges 2.9pc; S&P 500 up 2.1pc

  • Ben Wright: Britain really is broken and we can't afford to fix it

  • Sign up here for our daily business briefing newsletter

Energy bills will pass £5,000 next April, according to a grim new forecast.

Consultancy Auxilione said Ofgem may have to set the price cap at £5,038 per year for the average household amid elevated gas prices.

Experts warned the cap could hit £4,467 in January - likely to be a more worrying figure for households as it coincides with peak usage.

Such a scenario would leave the average household paying £571 for energy in January.

Ministers are holding crisis talks with utility bosses today.

In a LinkedIn post, Auxilione said: "It seems there is little appreciation for just how impossible that task really is and that energy companies and the government have little control over this in such a globally influenced market."

The Government has not updated its package of bill support for support for households since May, when prices were expected to peak in October.

09:48 AM

Latest ONS data points to activity slowdown

The Office for National Statistics' latest round of faster indicators are pretty mixed, with a 5pc fall in seated diners among the most notable shifts.

The volume of online job adverts was broadly unchanged on the previous week, bu t5pc lower than the same time a year ago.

Interestingly:

You can examine the stats further here:

09:31 AM

Heathrow boss: Flight cap has cut delays

John Holland-Kaye - Chris Ratcliffe/Bloomberg
John Holland-Kaye - Chris Ratcliffe/Bloomberg  

Heathrow boss John Holland-Kaye has defended the airport's controversial flight cap, saying it has reduced delays.

The top airport's 100,000 daily departing passenger limit has resulted in improved performance, he said, adding:

The airport said 88pc of its passengers are now clearing security with 20 minute, after it brought in 1,300 new security staff following severe hold-ups.

09:23 AM

Drax drops after Kwarteng says burning wooden pellet not sustainable

Drax - Dan Lewis/VisMedia
Drax - Dan Lewis/VisMedia  

Power company Drax has fallen as much as 11pc today after Kwasi Kwarteng, the business secretary, said the company's process of importing wood pellets from the US to burn is not sustainable.

Mr Kwarteng said the process "doesn't make any sense", the Financial Times reports.

The paper reports:

  • Read more: 'Greenwashing' power station given £2.4m in daily subsidies must 'justify environmental claims'

08:50 AM

US petrol drops below $4 a gallon in boost for Biden

US petrol prices have fallen below $4 a gallon for the first time since March, as inflationary pressures continue to ease in the world's biggest economy.

The fall - a boost for President Joe Biden, who has made lowering pump prices a priority - follows a softer-than-expected inflation reading yesterday.

08:29 AM

FTSE 100 flat

I appear to have overpromised on the FTSE - despite futures indicating a gain of about 0.1pc in the run-up to the open, Britain's blue-chip index rose as much as… 0.08pc. It's now down 0.06pc.

Not looking like a day to write home about (or text the family WhatsApp group about) for London.

08:24 AM

Those gas prices…

Here's a reminded of how Europe's benchmark gas prices have shifted in recent month (these are Dutch 1-month future, in euros/MWh):

energy prices
energy prices  

Auxilione says:

08:19 AM

New forecast predicts energy price cap will top £5,000 next April

A new grim milestone in energy forecasts: consultancy Auxilione says they expect Ofgem's energy price cap to top £5,000 next spring.

The consultancy predicted the regulator will push the cap to £5,038 next April, based on continued elevation in gas prices and a sharp upwards move yesterday.

Its analysts said:

07:58 AM

Economist: 'Matter of time' before house prices fall

Despite the still-upbeat assessment of surveyors, Capital Economics's Andrew Wishart reckons it's "just a matter of time" before house prices follow activity lower.

Commenting on the RICs survey, he said:

Here's that relationship, charted:

Capital Economics
Capital Economics  

Mr Wishart added:

07:44 AM

Era of €10 flights is over, says Ryanair boss

Michael O
Michael O'Leary - Valeria Mongelli/Bloomberg  

The age of the €10 plane ticket is over amid soaring fuel costs, the chief executive of Ryanair has warned.

Michael O'Leary said the budget airline's average fair would rise over the coming years, from €40 to around €50 in the next half decade.

He told the BBC's Today programme:

07:34 AM

Truss-backing economist: let banks lend to get renters on housing ladder

Gerard Lyons - Pier Marco Tacca/Getty Images
Gerard Lyons - Pier Marco Tacca/Getty Images  

RICS' report comes as a separate paper called on policymakers to shake-up mortgage rules and remove red tape preventing millions of renters from getting on the housing ladder.

Gerard Lyons, former economic adviser to prime minister Boris Johnson, urged the government to move away from taxpayer-funded schemes and give banks the power to lend more money to people they think are less risky.

The influential economist, who is backing Liz Truss to become the next prime minister, also said renters should be allowed to use their payment history to boost their chances of getting a mortgage.

Longer fixed-rate deals and bigger mortgages for safer borrowers would also get more people on the ladder, he said. Mr Lyons claimed up to three million people could benefit from the changes.

07:24 AM

Supply remains crucial despite rate worries

Even as rising mortgage rates, falling real wages and recession fears drag on the demand side of the housing market, it's supply - or a severe lack thereof - that underpins surveyors' bullish view on prices. Per RICS:

Rental demand also remained strong, according to RICS, with a net balance of 36pc of property professionals reporting an increase. However, with more landlords taking their properties off the market, rents are also expected to rise in the near-term.

07:16 AM

Agenda: House prices rise despite interest rates pushing up costs for buyers

Good morning. Rapidly-rising interest rates won't take the heat out of the UK's housing market, a new report says.

The Royal Institution of Chartered Surveyors (RICS) says a lack of properties coming onto the market will offset waning interest from buyers in the coming year.

A lack of properties for sale is expected boost prices, even as buyer interest wanes, according to the Royal Institution of Chartered Surveyors (RICS).

While sales continued to decline in July compared with the previous month, RICS said a net balance of 63pc of surveyors reported an increase in house prices rather than a decline.

This "firmly upward trend" was reported across the UK, and is expected to continue over the next 12 months, RICS said.

Meanwhile, the FTSE 100 is set for a mild rally as relief from yesterday's cooler-than-expected US inflation figures buoys markets.

5 things to start your day 

1) How stealth taxes became Gordon Brown's grimmest legacy  Frozen thresholds amid soaring inflation mean one worker in every nine pays the higher rate of income tax

2) Britain faces threat of rolling blackouts as electricity rationing becomes 'load shedding'  As supplies falter, the UK could see the first managed decline of its energy system for decades

3) Top banker quits after telling female colleague he needed 'love and affection'  Citigroup dealmaker Jan Skarbek was suspended after allegedly making the comments on a staff getaway

4) Russia starts stripping aircraft for parts as sanctions bite  Aeroflot forced to cannibalise planes to keep flying

5) Disney plans ad-funded version of streaming service in battle with Netflix  Marvel and Star Wars owner defies slowdown fears with big jump in subscribers

What happened overnight 

Hong Kong stocks opened with small gains on Thursday, with the Hang Seng Index climbing 1.17 per cent, or 229.73 points, to 19,840.57.

The Shanghai Composite Index added 0.42 per cent, or 13.45 points, to 3,243.47, while the Shenzhen Composite Index on China's second exchange rose 0.47 per cent, or 10.18 points, to 2,191.01.

Coming up today

  • Corporate: Antofagasta, Coca-Cola HBC, Derwent London, Entertain, M&G, Network International Holdings, OSB Group, Petrofac, Prudential, Savills, Spirax-Sarco Engineering (interims)

  • Economics: Jobless claims (US), producer price index (US)

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