Displaying items by tag: cost of living

Ofgem has announced plans to offer 'no standing charge' energy tariffs and provide debt relief for struggling households. The standing charge, a fixed daily fee averaging 92p, has risen significantly in recent years and disproportionately impacts low-energy users and prepayment meter customers. The new tariffs will eliminate these charges, though higher unit rates for gas and electricity may offset savings for higher energy users. Additionally, Ofgem is proposing debt relief measures, including partial or full debt write-offs and debt-matching schemes, where suppliers match customers' repayments to reduce arrears. With energy debt exceeding £3.8 billion and average arrears rising 37% in the past year, these changes aim to alleviate financial strain on vulnerable households. Funding for the initiatives will be spread across network charges and energy suppliers, with plans to implement zero-standing charge tariffs by next winter. Ofgem also encourages households to register for support programs like the Priority Services Register and contact suppliers early if facing energy debt.

On 20 November a nationwide general strike disrupted Greece as workers demanded better pay and improved living standards. Doctors, teachers, transport workers, and trade union members were among those who joined the protest. In Athens, demonstrators chanted for workers' rights and decried the high cost of living, with inflation in energy, food, and housing outpacing salary increases. The strike reflects frustration over the lingering effects of Greece’s 2009–2018 debt crisis, which required severe wage and pension cuts in exchange for €280 billion in bailouts. Though the economy has rebounded, wages remain low compared to the EU average, and many workers report a 50% reduction in purchasing power. The government has raised the minimum wage four times, now at €830, with a target of €950 by 2027, but protesters argue these measures fall short. The strike coincides with the submission of Greece's 2025 budget, which includes plans for modest economic growth and increased spending on wages and pensions.

Despite a recent Bank of England base rate cut from 5% to 4.75%, many major lenders have increased mortgage rates and withdrawn top deals, leading to higher costs for borrowers. Around 200 deals have disappeared from the market in the past month. After the Bank’s rate reduction, average two-year and five-year fixed mortgage rates have increased to 5.44% and 5.17% respectively. Experts suggest lenders are raising rates to manage demand and maintain service standards as market conditions fluctuate. Notably, smaller lender MPowered Mortgages has reduced rates, contrasting with the broader trend. Borrowers are advised to secure current deals promptly to mitigate further costs.

In September, UK inflation unexpectedly fell to 1.7%, the lowest rate in 3.5 years, down from 2.2% in August. Lower airfares and petrol prices were the main factors behind this slowdown. The inflation rate now stands below the Bank of England's 2% target, opening the door for potential interest rate cuts. The bank, which has already lowered interest rates once this year, is expected to cut them again in November by 0.25%, with another cut likely in December. While lower inflation is good news for many, economists warn that inflation could rise again due to increased household energy bills. The drop in inflation will also impact the rise of benefits like universal credit, though this will be lower than the expected 4.1% rise in the state pension. Despite the positive signs, the cost of living remains challenging, particularly for low-income families struggling to balance essential expenses like food and heating.

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.