Refusing to pay energy bills will put up costs for all, Ofgem warns

Refusing to pay energy bills will put up costs for all, Ofgem warns

Ofgem energy bills refuse crisis Russia gas cost of living crisis – Jeff J Mitchell/Getty Images

Refusing to pay energy bills will push up costs for all, the energy regulator has warned, ahead of an expected leap in average household bills which will deepen the cost of living crisis.

Jonathan Brearley, chief executive of Ofgem, urged households not to take part in a growing civil disobedience campaign, as he blamed Russia for soaring wholesale gas costs.

The grassroots Don’t Pay UK campaign is calling for people to boycott their bills in October. Martin Lewis, the founder of Money Saving Expert, has warned Britain is approaching a “poll tax moment”.

Speaking on BBC Radio 4’s Today programme, Mr Brearley said: “I know everyone is extremely worried about not paying their energy bill. But absolutely, I would not encourage anyone to join a campaign like this.

“For two reasons – first of all it will drive up costs for everyone across the board.

“Secondly, if you are facing difficulty paying your bill, the best thing you can do is to get in touch with your energy company, talk to them, make sure you have access to all the help and support that’s available, so you are not paying more than you need to, and get access to wider help with debt advice.”

09:42 AM

Energy bills boycott will ‘damage things further’

Ofgem boss Jonathan Brearley has warned consumers that refusing to pay their energy bills will push up costs even further after a campaign was launched encourage Brits to boycott their bills.

He said: “I wouldn’t encourage anyone to withhold their bill; it damages things further and it will impact them personally.”

Here’s more from Rachel Millard:

He spoke as Ofgem this morning confirmed plans to reset the price cap on energy bills every three months rather than every six months.

The cap is next due to be reset in October. Analysts predict the level will rise from £1,971 currently to more than £3,000 – compared to £1,277 last October.

Cornwall Insight, the energy analysts, predict the price cap will hit £3,359 this October before rising to £3,616 in April.

Wholesale gas prices have been exceptionally high since last September, with Russia worsening global shortages by restricting supplies to Europe in retaliation for sanctions imposed over its war on Ukraine.

09:34 AM

Fraudster guilty of scamming investors out of £400m with fake Caribbean resort scheme

ICYMI – The Serious Fraud Office has convicted a fraudster of encouraging thousands of people to invest in properties in the Caribbean that were never built.

Helen Cahill has more:

David Ames has been found guilty on two counts of fraud by abuse of position for his role in the seven-year scheme as head of Harlequin Group.

Mr Ames convinced 8,000 investors to pay a 30pc deposit on an unbuilt villa or hotel room and took half of the money as fees for the company and salesmen.

The company then only put 15pc of the deposits towards construction and never secured additional funding for the scheme.

Harlequin ultimately sold investors around 9,000 units across a string of proposed holiday resorts on the Caribbean islands but only delivered around 200 units before collapsing into administration in 2013. Investors ultimately wracked up losses totalling £398m.

Mr Ames promoted the investments through videos promising tennis, golf and football academies on the resorts sponsored by celebrities.

​Read Helen’s full story here

09:13 AM

Go-Ahead bidders raise offer by £20m

Go-Ahead takeover Southern rail - Daniel LEAL-OLIVAS / AFP

Go-Ahead takeover Southern rail – Daniel LEAL-OLIVAS / AFP

The suitors courting transport group Go-Ahead have raised their takeover offer by more than £20m.

Australian bus network Kinetic and Spanish transport firm Globalvia agreed to buy Go-Ahead, which runs the Govia Thameslink franchise, for around £647m in June.

But the consortium of investors has now raised its takeover bid by £22m to about £669m – despite not having any competing suitors.

In July, Australian bidder Kelsian dropped out of the race to buy Go-Ahead after falling share prices in Australia forced the group to withdraw its offer.

Michael Sewards, co-chief executive of Kinetic, and Javier Perez Fortea, chief executive of Globalvia, said: “This transaction will create a leading global, multi-modal, mass transit platform and unlock value for all stakeholders.”

09:02 AM

Suella Braverman: BoE ‘too slow’ to raise interest rates

Attorney General Suella Braverman has taken aim at Bank of England Governor Andrew Bailey for being “too slow” to raise interest rates.

The former contender for prime minister was asked by Sky News about Liz Truss’ tax cut pledges and concerns that higher interest rates will dampen economic growth.

She said:

Interest rates should have been raised a long time ago and the Bank of England has been too slow in this regard.

Interest rates are a really important gravitational pull on the value of assets and it is really important to curb inflation so actually it is very welcome that the Bank of England is increasing interest rates now but what we really need to do, and this is why Liz has got the right plan for dealing with the cost of living challenges, is that we have got to ensure that we review the Bank of England’s mandate.

She is very interested in looking at how the Bank of England operates, maintaining its independence of course, but also ensuring that it is much better placed and more responsive in the future to economic challenges like the type we are seeing at the moment.

08:52 AM

Serco shares rise after profit upgrade

Shares in Serco pushed higher this morning after the outsourcing giant lifted its profit forecast for the second time.

The FTSE 250 firm jumped as much as 7.6pc to its highest since November 2014.

Serco lost around £220m of revenues in the first half as the Test and Trace system was wound down. But it offset this with better-than-expected trading in other divisions, including UK immigration services.

The company said its order book for the rest of the year was “very strong” at £14.6bn – up by more than half a billion on the prior year.

As a result it lifted its forecast for full-year profit to £230m. That’s up from its previous increase to £225m in May.

08:43 AM

FTSE risers and fallers

The FTSE 100 is treading this water as investors turn their attention to the Bank of England’s interest rate decision at noon.

The blue-chip index was flat ahead of what is expected to be the biggest interest rate rise since 1995. Markets reckon the Bank will raise rates by 50 basis points to 1.75pc.

Shares in Unilever fell 0.8pc, providing the biggest drag on the index. after Ben & Jerry’s independent board said the company had frozen its directors’ salaries last month as a pressure tactic.

Rolls-Royce also tumbled more than 6pc after it warned on the continuing impact of inflation and the war in Ukraine.

It was better news for Next, which gained more than 2pc after reporting a surprise rise in sales. Phoenix Group was also in the green after announcing its takeover of Sun Life UK.

The domestically-focused FTSE 250 rose 0.5pc.

08:24 AM

Petropavlovsk to sell off Russian business for $600m

Embattled miner Petropavlovsk has secured an agreement for sale its Russian business and the majority of its subsidiaries in other countries.

Petropavlovsk, which was suspended from the London Stock Exchange last month after filing for administration, has reached the deal with UMMC, Russia’s second largest copper producer.

The sale is conditional on a number of matters and has a completion deadline of September 30. If it goes ahead, Petropavlovsk could receive more than $600m (£493m).

Petropavlovsk was plunged into crisis earlier this year after the UK slapped sanctions on Gazprombank, its biggest lender. This left it unable to sell gold and repay its debts.

08:17 AM

Phoenix Group buys Sun Life UK for £248m

Insurance giant Phoenix Group has inked a deal to buy Sunk Life UK for £248m in cash.

The FTSE 100 group is buying the life insurer from parent Sun Life Financial as it looks to expand its offering for British customers.

Phoenix said the takeover, which is set to complete in the first quarter of next year, is expected to deliver about £470m of incremental long-term cash generation.

Shares rose 2pc following the announcement.

08:14 AM

Meggitt boosted by travel rebound

Aircraft parts supplier Meggitt has posted a 21pc rise in first-half revenue as manufacturers ramped up production to meet a rebound in travel demand.

The FTSE 100 company, which supplies to both civil and military aerospace manufacturers including Boeing and Airbus, said revenue came in at £821m in the first half, compared to £680m last year.

Its first-half underlying profit before tax rose 31pc to £63.6m.

Still, major aerospace companies have warned that supply chain troubles have hampered the industry’s ability to capitalise on surging travel demand.

Meggitt, which agreed to a £6.3bn takeover offer from US rival Parker Hannifin, reaffirmed its plan to close the deal by third quarter of 2022 after securing regulatory approval earlier this year.

08:07 AM

Ofgem warns of ‘very challenging winter’ as it confirms price cap change

Ofgem has warned of a “very challenging winter” for Britons due to Putin’s gas cuts as it confirmed changes to the price cap review process.

While the UK only imports a small amount of gas from Russia, Ofgem said Putin’s actions would cause disruptions to last much longer and push prices even higher than before.

It came as Ofgem confirmed it will review the energy price cap every three months instead of twice a year.

The regulator said the move would help to provide stability in energy markets and reduce the risk of further supplier collapses that have sparked havoc and pushed up prices further.

Jonathan Brearley, chief executive of Ofgem, said:

I know this situation is deeply worrying for many people. As a result of Russia’s actions, the volatility in the energy markets we experienced last winter has lasted much longer, with much higher prices than ever before. And that means the cost of supplying electricity and gas to homes has increased considerably.

The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now. Today’s changes ensure the price cap does its job, making sure customers are only paying the real cost of their energy, but also, that it can adapt to the current volatile market.

08:02 AM

FTSE 100 slips ahead of Bank of England decision

The FTSE 100 has started the day on the back foot ahead of the Bank of England’s decision on interest rates.

The blue-chip index slipped 0.1pc to 7,441 points.

07:55 AM

Businesses face 500pc energy bill surge

Businesses are facing energy bill increases of up to 500pc that could put their survival in jeopardy this winter, analysts have warned.

Energy costs for companies are rising even faster than for households and risk pushing businesses “over the edge” unless the Government intervenes, Cornwall Insight said.

Companies usually negotiate fixed-price energy contracts to begin from the beginning of October.

Firms whose two-year contracts are coming to an end face a five-fold increase, while those who took out a contract a year ago are likely to see bills double, according to the analysis seen by The Times.

07:44 AM

Rolls-Royce profits slashed by inflation and Ukraine war

Rolls-Royce inflation engines - JUSTIN TALLIS / AFP

Rolls-Royce inflation engines – JUSTIN TALLIS / AFP

Rolls-Royce has warned pressures from rising inflation, the Ukraine war and supply chain troubles will continue throughout next year, but said profitability should improve over the final months of 2022.

The engine maker saw underlying operating profits more than halve to £125m for the first six months of the year, down from £307m a year ago.

It said operating margins had been squeezed in the first half, while it said the “external environment remains challenging, with the war in Ukraine, inflationary pressures, and supply chain constraints all impacting our business”.

It added: “We expect these issues will persist into 2023 and have been managing our business to address and minimise the impact.”

However, Rolls-Royce said margins were set to improve in the second half of the year with a boost from recovery in the travel sector and higher demand for long-haul flights.

07:39 AM

Glencore hands $4.5bn to investors as profits double to record high

Glencore coal profits - Per-Anders Pettersson/Getty Images

Glencore coal profits – Per-Anders Pettersson/Getty Images

Glencore will hand out an additional $4.45bn (£3.7bn) to shareholders in dividends and share buybacks as profits more than doubled to a record high thanks to surging coal prices.

The world’s largest coal exporter reported core profit of $18.9bn in the first half, with coal earnings of $9.5bn exceeding the entire company’s profit a year earlier.

Prices for coal have surged this year as the global energy crisis boosts demand for fossil fuels, while Glencore’s trading division has also benefited from volatility across commodities markets in the wake of Russia’s invasion of Ukraine.

Glencore said it would top up its dividend by $1.45bn and buy back a further $3bn in its own stock.

07:31 AM

Next gets surprise heatwave boost

Good morning.

There’s an upbeat update from Next this morning, which revealed a surprise spike in sales in its latest quarter.

Full-price sales rose 5pc in the second quarter, jumping £50m ahead of guidance. That came despite fears trading would slump below pre-Covid levels.

Next pinned the positive performance on the heatwave, as well as higher demand for formalwear as social events such as weddings returned.

As a result, the retailer raised its guidance for full-year profit by £10m to £860m.

But it wasn’t all rosy. Next said it didn’t expect the trading boost to last, warning that the impact of inflation on consumer spending would worsen in the second half of the year.

5 things to start your day

1) Walls close in on Zuckerberg as executives desert Meta  Deep turmoil inside social media giant and brain drain at the top leave founder looking increasingly isolated

2) Rural households clamouring for onshore wind turbines, says Octopus boss  Energy supplier says it is ‘pushing at an open door’ with plans to boost output

3) Taiwan crisis to wreak havoc at ports and disrupt one of world’s busiest shipping lanes  China’s live-fire military drills spark fears of delays and collisions

4) UN chief attacks ‘immoral’ oil companies and claims they are punishing the poor  António Guterres calls for action against energy businesses across the world

5) Wildfire fears prompt Marks & Spencer to stop selling disposable barbecues  London Fire Brigade urges other retailers to follow suit

What happened overnight

Asian stocks rose this morning, taking cues from a strong rally on Wall Street after robust economic data and upbeat corporate guidance boosted investor appetite.

Japan’s Nikkei rose 0.6pc, while Chinese blue chips also added 0.6pc and Hong Kong’s Hang Seng jumped 1.2pc, with an index of its tech stocks surging 2.3pc.

MSCI’s broadest index of Asia-Pacific shares gained 0.7pc.

Coming up today

  • Corporate: Pantheon International (full-year results); Centamin, ConvaTec Group, Evraz, Glencore, Hikma Pharmaceuticals, Informa, Meggitt, Mondi, Morgan Sindall, Next, Rolls-Royce, Serco, Spirent Communications, Tritax Big Box (interims)

  • Economics: Bank of England interest rate decision (UK), construction PMI (UK), jobless claims (US)

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