Displaying items by tag: cost of living

Energy bills are to rise in England, Wales, and Scotland; households using typical amounts of gas and electricity will now pay about £149 more, bringing the average bill to £1,717 a year. Experts are urging billpayers to submit accurate meter readings to avoid being charged for estimated energy use at the new, higher rate. This price increase comes as winter approaches, but without extra cost-of-living payments or universal winter fuel payments for pensioners, causing concern for many. The price cap, set by energy regulator Ofgem, has been adjusted, raising gas and electricity unit prices and standing charges. Energy debts have also risen, with households collectively owing £3.7 billion to suppliers. Support for vulnerable customers is available through initiatives by energy companies, and pensioners on low incomes may be eligible for pension credit. Forecasters are predicting a slight drop in prices in January, providing some relief, but many fear these increases will exacerbate financial difficulties for households already struggling with high costs.

On 1 October, in a televised speech to mark Nigeria’s 64 years of independence, President Bola Tinubu acknowledged the financial struggles and search for meaningful employment faced by many people. He listed security gains and investments in farm machinery among achievements which would help ease economic pressures, and also announced a national youth conference, known as ‘the 30-day Confab’, whose recommendations would be considered and implemented. The president stressed that the government is mindful of future generations and their potential to contribute to the nation’s progress. However, protests against the current economic hardships have taken place in several states, reflecting discontent among citizens. Some expressed disappointment with the lack of concrete measures to reduce inflation and improve living standards. Tinubu defended his economic reforms, which have pushed the inflation rate to a 28-year high.

Millions of pensioners in the UK are facing a challenging winter after the Government voted to cut automatic winter fuel payments to pensioners. The decision, supported by nearly 400 Labour MPs, addresses a £22 billion funding gap. Rachel Reeves defended the move, assuring that the payment will still be available to those receiving Pension Credit. However, many pensioners, including Francis Moore, expressed shock and disappointment, warning that this will lead to a bleak winter for the elderly. Moore highlighted the severe impact of rising energy costs on pensioners who already struggle to make ends meet. He criticised the Government for not doing more to support elderly citizens, stating that warmth is essential for survival. Pensioners will have to budget carefully for basic necessities while rising electricity bills threaten to worsen their financial hardship. There is widespread criticism of the Government’s handling of pensioner welfare; many are accusing it of neglecting a vulnerable generation.

The British Chambers of Commerce (BCC) have reported that nearly half of UK businesses plan to raise prices soon, despite overall inflation pressures easing. Their survey, covering 4,800 firms, found 46% expecting to increase prices, 51% planning to maintain current prices, and only 3% foreseeing a reduction. This pricing trend is linked to economic challenges affecting business investment, which remains sluggish. A significant factor is the higher labour costs, particularly in the hospitality and manufacturing sectors; 77% and 76% of firms respectively cite it as a major influence on pricing decisions. Additionally, the survey indicates a stagnant landscape for business investment. Most firms reported no change in their investments in new equipment and machinery this quarter: only 24% have increased their investment, while 16% noted a decrease.

Shoplifting in England and Wales has reached its highest level in two decades, with over 400,000 incidents reported for the first time since 2002. The Office for National Statistics (ONS) revealed a sharp increase from 304,459 cases in the previous year to 402,000 in the year up to September 2023. The rise coincides with the ongoing cost-of-living crisis, exacerbated by escalating prices and post-Christmas financial strain. A survey indicated that 84% of people expected January to be financially challenging due to increased costs and holiday spending. There was a 4.3% inflation rate in December 2023, despite a slight decrease in food inflation from 7.7% in November. Rising food prices continue to affect millions. Major retailers, including Co-op, reported substantial losses due to shoplifting. In response, the Government has launched an action plan to address the issue, with ongoing efforts to combat the crime.

The upcoming Brexit rule changes, effective from 31 January, are expected to increase food prices in the UK. New regulations will require additional paperwork for EU businesses exporting animal and plant products to the UK, particularly affecting medium and high-risk foods. From April, physical checks will be implemented on these goods. In October, a broader range of items will be reclassified from low to medium risk, necessitating more paperwork. This reclassification will particularly impact fruit and vegetables, with an estimated £200 million added to import costs, likely to be passed on to consumers. Businesses transporting mixed consignments and local wholesalers may face significant impacts. The Government, while acknowledging potential price increases, suggests a negligible impact overall. These changes aim to protect the UK's biosecurity and support efficient trade.

The Bank of England's interest rate hikes, aimed at reducing inflation, have led to a slowdown in the UK housing market. Recent data reveals a significant drop in house prices, the largest since October 2011. This decline, most pronounced in London, reflects the impact of pandemic-driven price surges. Despite this decrease, the housing market faces long-term challenges. Interest rates have risen, functioning slowly like drip filter coffee, and have a delayed effect on the market. This delay is due to the time taken for banks to adjust mortgage rates and for these changes to be reflected in official statistics. The latest data from the Office for National Statistics (ONS) show a 1.2% drop in house prices over a year, marking the fastest decline in over a decade. Financial markets anticipate rate cuts next year, which could revive the market. However, the overall cost of living remains high, with increased expenses from food to household bills. Over a million people will face higher mortgage costs next year.

The UK has experienced 14 consecutive interest rate rises, affecting both mortgage holders and savers. According to the Office for Budget Responsibility (OBR), in 2023 the gains from higher savings returns have surpassed the costs of rising mortgage rates, slightly increasing real household disposable income. However, this improvement is flanked by decreases in disposable income in 2022 and an expected drop in 2024. The impact of these rate hikes has been uneven, with many having minimal savings and large sums in non-interest-bearing accounts. The OBR warns of further financial strain in 2024 as fixed-rate mortgages expire, leading to higher debt interest payments and a decline in disposable income. This forecast remains significant even if the Bank of England does not increase rates beyond the current 5.25%. The situation is also impacting non-homeowners, contributing to rising rents. Overall, the OBR suggests tougher financial times ahead, even without additional rate hikes.

House prices fell at their fastest annual rate in 14 years in August as rising mortgage rates affected the market. ‘We may be seeing a greater impact from higher mortgage costs flowing through to house prices,’ said the Halifax director of mortgages. ‘The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous fifteen years.’ First-time buyers have welcomed a fall in prices but face relatively high repayment costs, alongside other cost-of-living pressures such as higher prices in the shops. On the flip side, wage growth has helped affordability. Despite the fall in property values, the Halifax said that prices were only back to the level seen at the start of last year, and still £40,000 higher than before Covid.

Last week we prayed about school uniform costs. This week we can be grateful that Marks and Spencer are offering families money off children’s clothes if they donate school uniform hand-me-downs to help parents struggling amid the cost of living crisis. The second-hand uniforms will be sold via Oxfam’s high street chain and a new ‘back-to-school’ eBay shop.