EDF raises electricity prices for second time this year
The energy firm EDF has announced that from 21st June 2017, customers will see an increase in their gas and electricity prices for a second time this year. Customers will see an increase of 9% for their electricity supplies, while gas supplies will rise a further 5.5% for standard tariffs. The hike in prices will see the average dual-fuel customer paying a further £78.00 per year, raising their annual bill to £1,160. It has been reported that the majority of EDFs customers are on fixed price deals and will not be affected by these rises. However, Ofgem has criticised this rise in costs as they could not provide justification with EDF’s announcement.
The Chief Executive of Dermot Nolan of Ofgem said, “EDF’s second price rise in four months, when there has not been a dramatic rise in wholesale energy prices since it last put up prices, is difficult to justify and is further evidence that the energy market is not working in all consumers’ interests.”
EDF customers on a standard tariff could be saving more than £300 per annum by changing their tariff to a best fixed-price deal. It has been reported that EDF has hit millions with this second hike in their prices. Money experts are advising customers to compare their electricity and gas suppliers sooner rather than later, describing this most recent move by EDF as a “final red alarm bell”.
According to a current cabinet minister, the Conservative Party are planning to keep household energy bills the same should they be re-elected. According to the Sunday Times, consumers could even see a reduction in energy bills of up to £100 per year. This could be good news for approximately 17 million families in Britain.
As expected, the Labour candidates are sceptical about this and suggest that this should be taken “”a pinch of salt”. The energy company Uswitch has suggested that this manifesto could do more harm than good. Other energy suppliers are believed to have suggested that a cap on prices could potentially lead to higher prices rather than lower ones. The plan would be to cap the energy bills for seven out of ten households, these being those who are on the standard variable tariff – these are the tariffs that are often criticised by consumer watchdogs.
For those households who are already using prepayment meters there has already been a cap on energy prices, this happened after the competition and markets authority released their annual report, suggesting that customers had overpaid by £1.4 billion.
Work and Pensions Secretary Damian Green told the Peston on Sunday programme: “There will be a lot about energy policy in the manifesto [and] obviously there will be more detail, but… I think that people feel that some of the big energy companies have taken advantage of them with the tariffs they have got.”
UK Wages Growth Slows Down As Higher Inflation Bites
Unemployment in the UK has stayed at 4.7% and inflation is starting to wipe out official figures. Unemployment in the UK fell by 45,000 to 1.56 million from February 2017 according to reports from the Office for National Statistics (ONS).
In the same report the ONS have said that on average the weekly earnings for employees has risen by 2.3% including bonuses and 2.2% excluding, in comparison to the previous year.
Senior Statistician David Freeman from the ONS said, “A joint record employment rate and a new record high for the number of vacancies point to continued strength in the labour market. However, higher inflation, coupled with subdued earnings increases, means that the real growth rate in pay has tailed off to just above zero.”
Banking on less
Nine years after the government bought 43.4% of Lloyds Banking Group in order to bail them out of the financial crash, taxpayers have now seen their investments repaid. It has been reported that the majority of the money that has been returned has come from the sale of Lloyds shares during 2013, with the remaining 2% due to be cleared this year. This recent announcement has placed Lloyds as the first bank to be the fastest to recover since the financial crisis.
RBS on the other hand is proving to be ‘the elephant in the room’, with the government’s 72% stake to be sold at a loss, which means that much more of the cost will be borne by the taxpayer.
The recovery of the taxpayers money has marked a significant milestone for Lloyds, and although it seemed the right decision for the government to step in and assist them during the financial crisis, overall it has proven that governments should not be in the business of owning and running banks in the long term. Even so, in February 2017, Lloyds confirmed its highest annual profits in ten years.
During the bailouts by the government, RBS was worth 502p per share. Now totalling £45 billion, their shares are currently trading at approximately 239p. The government are intending to return RBS to private ownership as soon as possible, but in the current economic climate, the lower price is a reflection of how far the bank has fallen since the crisis.
March has seen retail quarterly sales fall by their greatest level in seven years in the UK, even though the price of everyday goods has continued to climb. The reduction has been seen across most areas in retail trade, with the exceptions in sales of textiles, clothing and footwear. Figures are also showing that the total amount spent is still above last year’s sales.
The rising price of food and fuel combined with slow wage rises are encouraging consumers to decrease their spending, yet at the same time the value of the pound is continuing to put pressure on retailers.
The average in-store prices have seen a rise of 3.3%, which is the highest growth since March 2012. It has been reported that contributions from increased petrol station prices has pushed this growth to 16.4%. The instability has been described by one pundit as “clouds gathering over British consumers”.
British consumers nethertheless have indulged in the good things in life since the credit crunch, but after retail sales sharply fell during January to March of that year, the first quarterly decline was exposed since 2013, the largest fall since 2010 when the temporary cut in VAT was removed.
The reduction in sales has been reported to have been caused by recent increases in inflation, with current pricings running along the same rate as wages. An increase to inflation is due in the not too distant future where the fall in the value of the British pound will increase the price of imports.
Sales online on the other hand, have continued to rise by 19.5% since last year and another 0.5% since February.
The Sky’s not the limit
Consumers are not taking Sky TV’s offers of their expensive television packages, and are favouring cheaper alternative TV packages such as Netflix and Now TV causing a slowdown in Sky’s main pay-TV business. Sky have reported a growth of just 2.6% in the third quarter to £2.4 billion, regardless of price rises and the launch of their mobile network. Reports have shown that a 3% reductions has been revealed in advertising revenue. Analysts are also expecting a greater dip, even though Sky have reiterated that they are the market leaders.
A 30,000 drop in subscribers in the UK in the first three months to the end of March has also been seen, confirming that customers are looking to downgrade systems and go with the cheaper options available. Sky’s Chief Executive has blamed the decline on “weak consumer confidence amid a slowing housing market.”
Brexit to Hit Music industry
Brexit is going to have an impact upon the music industry. It doesn’t matter whether you listen to music that you have downloaded or if you go to the shop to buy music. Over recent years the biggest impact on music has been the developments in technology. There is now a bigger challenge for the music industry to deal with, and suprisingly it is because of the UK’s decision to leave the European Union. Although Brexit is not expected to be completed until 2019 after lengthy negotiations, there are areas of the music industry that can already be identified as being affected by Brexit.
Recently record stores have seen an increase in the sales of traditional vinyl, to the point that they have outsold both CD sales and downloads. It had been widely expected previous to this that vinyl sales would die a slow and painful death. Should Brexit negotiations prove unfavourable with regards to trade, then there may be charges applied to goods that come into the UK. This would mean that vinyl records which are currently imported would incur further costs. Within the UK there are only two places where vinyl is pressed and records produced. This is similar with regards to CDs.
Should record producers have to pay more to produce the goods, then naturally the consumer will have to pay more to purchase the goods.
The General Election, What will it cost?
With Prime Minister Theresa May calling a general election, it is likely to cost millions of pounds less than the planned general election held in 2015. The lack of time available for planning and campaigning has led to a significant decrease in costs. It is widely expected that parties will reduce their spending by £15 million due to the short turnaround between the announcement of the election and the date we go to the polls.
When a party sits down and completes a financial breakdown there are three main areas that have to be considered; administration of the campaign, opportunity costs (these are costs that are incurred during the day to day running of the campaign), and finally the money spent by each of the political candidates.
The amounts spent on administration and opportunities is widely expected to be similar, if not the same as in previous years. However, there may be a reduction in these costs as local authorities will have less time to prepare. Due to the time scale available to the parties, the costs of campaigning will be significantly reduced.
In previous elections, campaigns have been broken down into long and short campaigns, and spending has been reflected in this. However due to the small run-up to this election there is not sufficient preparation time to run a long campaign.