Global

At the mercy of Putin: Russia flexes muscles over gas supplies


Will the lights keep on this winter? National Grid warns of a larger threat of blackouts and says electrical energy supplies will likely be ‘tight’ this yr after undersea cable hearth 

A map showing the various electricity cables that bring in electricity to the UK from the rest of Europe. The IFA link is seen bottom right in green

A map displaying the numerous electrical energy cables that herald electrical energy to the UK from the relaxation of Europe. The IFA hyperlink is seen backside proper in inexperienced 

Britain faces ‘tight’ electrical energy supplies this winter after a hearth disrupted a significant cable bringing vitality from France – loading recent strain onto a system that’s already being stretched to the restrict by excessive demand and restricted provide.  

The National Grid mentioned the incident at a connector station in Kent final month had reduce the quantity of vitality that may be imported by way of the 1FA undersea cable – which runs below the English Channel to Calais – by half. 

By October 23, 1GW of energy needs to be restored following repairs, however the full capability of 2GW won’t be reached till extra work on account of final till March subsequent yr.  

European wholesale gas and energy costs have rocketed this yr on account of lower-than-usual gas shares this summer time, lowered provide from Russia, the onset of colder temperatures and infrastructure outages.

High UK wholesale gas costs have helped to carry wholesale energy costs as gas crops account for round 40% of electrical energy technology in Britain. 

Vladimir Putin was immediately accused of turning vitality ‘right into a weapon’ by hinting he’ll pump extra gas into Europe if Brussels approves Russia’s controversial pipeline bypassing Ukraine as Britain’s looming vitality disaster acquired worse for tens of millions who now face paying between £500 and £800-a-year extra for his or her vitality in 2022.  

Wholesale gas costs surged to a file 400p yesterday – a 37% enhance in 24 hours and 600% up on January – however dropped to round 274p after the Russian President’s intervention.

Experts mentioned immediately that the vitality value cap will rise to about £1,660 from April 1 – up from £1,277 immediately – and the most cost-effective fastened deal is now £1,800-a-year – approaching £1,000 greater than 12 months in the past.

The ache attributable to sky-high gas costs got here as Britons face the greatest squeeze on their funds for greater than a decade as a result of of inflation, rising costs and looming a number of tax will increase all coupled with product shortages attributable to gaps in world provide chains and a scarcity of HGV drivers. 

Russia’s manipulation of the gas market hits costs in the UK as a result of Britain is one of Europe’s largest customers of gas however its personal manufacturing in the North Sea and the Irish Sea has decreased massively over the previous 20 years, forcing the Government to now import greater than half of its gas from primarily Norway – but in addition from Holland, Belgium and Russia via lengthy distance pipelines. 

A small quantity comes as liquid pure gas, primarily by ship from the Middle East – however these supplies have additionally been hit by rising post-pandemic demand in Asia, additional elevating costs. 

Putin is accused of intentionally withholding gas supplies as leverage with the EU, who he needs to log off on his new £8.1 billion Nord Stream 2 gas pipeline, run by state vitality Gazprom, that bypasses Ukraine. 

Sending the value of a therm tumbling by £1 yesterday afternoon, Putin mentioned pointedly: ‘Let’s suppose via presumably rising provide in the market, solely we have to do it fastidiously. Settle with Gazprom and discuss it over’.

In response Jennifer Granholm, the US secretary of vitality, mentioned the US is watching Russia ‘fastidiously’, including: You do not wish to see vitality made right into a weapon’. 

Tory MP Sir Iain Duncan Smith instructed MailOnline Russia was ‘bullying’ the EU and the UK needs to be exploiting shale gas supplies to get ‘fully clear of any dependency’.

‘Most of our gas is both house produced or from Norway. We should not depending on Russian gas in the identical approach as Europe is, particularly Germany,’ he mentioned.

‘But we needs to be permitting extra rationalization. It needs to be a reminder that we’re sitting on an enormous provide of shale gas. It is an absurdity to not wish to faucet into that. Either we make ourselves depending on international locations like Russia, or we really begin searching for extra gas supplies. You want again up to make sure now we have all the time acquired vitality if you want it, and you aren’t reliant on imported gas which could be very costly.’

Sir Iain mentioned: ‘Russia is taking part in video games with the Europeans and they’re decided to open Nord Stream 2.  That would bypass the Eastern Europeans. It will permit them to bully everybody from Ukraine proper the approach via utilizing their means to close off gas with out shutting it off to the Europeans.’ He added: ‘The jap Europeans are feeling fully let down by the European fee.’

Russia’s ploy emerged hours after French fishermen, offended at the delay in granting licences to plunder British waters, threatened to blockade meals and wine destined for the UK from France earlier than Christmas having already threatened to chop energy to Jersey. 

Rising vitality costs might add 30% to payments subsequent yr, specialists warn, and there rising considerations about inflation, leaving UK households going through an extra monetary squeeze as a result of of rising costs, labour shortages and gaps in world provide chains. A scarcity of HGV drivers led to farmers pouring milk down the drain immediately as a result of of a scarcity of transport with pig farmers fearing they need to kill 120,000 animals on their farms as a result of abattoirs lack the butchers wanted to carve them.

As a depressing winter approaches, petrol remains to be scarce and costs are up, meals costs are rising, home costs are rising and taxes reminiscent of nationwide insurance coverage and council tax are additionally about to go up all sooner than wages. The price of electrical energy and gas can also be hitting energy hungry industries reminiscent of metal, glass and chemical substances, which means customers will quickly be paying extra for an enormous quantity of merchandise together with vehicles, constructing supplies and even rest room roll.

Intel, the world’s largest maker of laptop chips, has mentioned that the scarcity attributable to covid shutting Asian factories won’t stabalise till 2023 and means digital presents for Christmas will likely be quick in provide. Boss Pat Gelsinger mentioned: ‘There is a few risk that there could also be a couple of IOUs below the Christmas bushes round the world this yr’.

As Britain is throttled by rising costs and inflation with a bleak winter approaching, it additionally emerged immediately: 

  • British home costs rose by the most in virtually 15 years with their climb to new file excessive ranges ton proceed;
  • Omni Energy has mentioned it expects to develop into the thirteenth UK vitality provider to go bust this yr; 
  • Labour shortages and transportation points proceed, with Nestle the newest enterprise large to warn of potential product shortages together with Christmas staple Quality Street; 
  • Intel has warned {that a} shortages of chips is ready to proceed into Christmas an ‘there could also be a couple of IOUs below the Christmas bushes round the world this yr; 
  • Council job might rise by as much as 5 per cent every year for the subsequent three years so as to pay for lengthy awaited social care reforms; 
  • MailOnline analysis reveals the price of grocery store staples reminiscent of pasta, tinned meals and meats have all risen by as much as 44% as a result of as inflation grips supermarkets; 
  • Nearly two-thirds of UK producers plan to lift their costs in the run-up to Christmas on account of rising inflation, in response to the British Chambers of Commerce; 
Wholesale gas prices surged to a record 400p yesterday - a 37% increase in 24 hours and 600% up on January - but dropped to around 274p after the Russian President's intervention

Wholesale gas costs surged to a file 400p yesterday – a 37% enhance in 24 hours and 600% up on January – however dropped to round 274p after the Russian President’s intervention

Putin said that Russia was ready to increase gas supplies, before raising the controversial pipeline his country wants to build, cutting out Ukraine

Putin mentioned that Russia was prepared to extend gas supplies, earlier than elevating the controversial pipeline his nation needs to construct, reducing out Ukraine

Map showing points of origin and destination of the Nord Stream pipe (solid line) and Nord Stream 2 pipeline (dotted line) between Russia and Germany. Putin hoped Nord Stream 2 would be finished two years ago, allowing Russia to bypass Ukraine in the south, which carries 50% of gas from Russia out via Poland

Map displaying factors of origin and vacation spot of the Nord Stream pipe (stable line) and Nord Stream 2 pipeline (dotted line) between Russia and Germany. Putin hoped Nord Stream 2 can be completed two years in the past, permitting Russia to bypass Ukraine in the south, which carries 50% of gas from Russia out by way of Poland

48836757 10064681 image a 45 1633528477100

Analysis of price rises in the last year shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10 and the price of a pint of beer is creeping close to £4

Analysis of value rises in the final yr reveals the price of a second-hand automotive has risen greater than £1,600, a tank of gasoline is up greater than £10 and the value of a pint of beer is creeping near £4

Exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) also yesterday revealed how inflation will cost the typical family of four an extra £1,800 by the end of this year. Meanwhile, a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900

Exclusive analysis for the Daily Mail by the Centre for Economics and Business Research (CEBR) additionally yesterday revealed how inflation will price the typical household of 4 an additional £1,800 by the finish of this yr. Meanwhile, a retired couple can anticipate to see dwelling prices rise by greater than £1,100, and a decrease earnings couple may very well be stung by practically £900

Soaring vitality payments, paying extra at the pump, NO meals and empty cabinets – how tens of millions are being clobbered by rising price of dwelling that can depart them THOUSANDS out of pocket 

Energy payments  

Millions face a looming winter vitality disaster and a warning that gas and electrical energy payments might surge by an additional £500 a yr. 

A shock 60per cent surge in wholesale gas costs at the starting of this week – on prime of earlier will increase of 600% since January.

National Grid has additionally warned of tight electrical energy supplies as the quantity of vitality from renewable sources reminiscent of wind, dropped.

The present UK vitality value cap, set by trade regulator Ofgem, is £1,277 – however analysts Cornwall Insight predict it can rise to £1,660 when it’s reviewed on April 1. Today the most cost-effective fastened gas and electrical energy deal obtainable in the UK is £1,700 – a month in the past it was £1,177.   Experts imagine households can pay £500 to £800 extra for vitality in 2022.

The price of vitality can also be hitting trade, who say they must cross it on to clients with it more likely to hit merchandise like vehicles, constructing supplies, chemical substances and even rest room rolls. 

Fuel costs

Petrol costs have soared to an eight-year excessive final month as filling stations cashed in on the gasoline disaster.

Average pump costs hit 136.8p a litre for unleaded – 22p dearer than in September 2020. It meant the price of filling the typical 55-litre tank in a household automotive was £12 dearer than a yr in the past, mentioned the RAC.

Separately, an AA examine discovered some forecourts are at the moment charging as much as 163.5p a litre for unleaded – 27p above the common. This would add an extra £15 to the price of filling up.  

House costs

Growth in British home costs gathered velocity in September after they rose by 1.7% from August, mortgage lender Halifax mentioned on Thursday.

In annual phrases, home value progress additionally accelerated to 7.4% from 7.2% in August. The common value of a indifferent house has surged by £41,000 over the previous yr as patrons have looked for more room, the analysis discovered. 

Taxes 

Council tax might have to rise by as much as 5 per cent a yr for the subsequent three years to maintain companies operating and pay for social care reforms.

That would add £299 on to the common council tax invoice for a Band D family.

The Institute for Fiscal Studies mentioned that below present authorities spending plans, an increase of no less than 3.6 per cent on council tax payments will likely be wanted per yr only for city halls to maintain companies operating at the ranges seen earlier than the coronavirus pandemic.

Such an increase would come on prime of the 1.25 per cent enhance in National Insurance introduced final month. 

Supermarket meals store

The common family spent £277 a month on meals bills, however the newest inflation studying suggests this might enhance to £285 a month this yr. 

Analysis by MailOnline of costs immediately in comparison with these in March 2020 discovered many staple items have gone up in price embody mushrooms, spring onions, cabbage, salmon, soup, kiwi fruit, apples and mineral water. 

Among the greatest value rises are eggs, sausages, fizzy drinks, fruit and bottled water; 

Price of a pint

The common value of a pint in the pub throughout the nation might quickly cross £4, the ONS has mentioned. In London the value is already via that barrier.   

And the different elements driving value rises….  

Inflation

Prices are rising at the quickest tempo in no less than 1 / 4 of a century as companies cross on the prices of labour, supplies, transport and vitality to customers.

Firms in the companies sector, which vary from transport firms and hairdressers to pubs and eating places, hiked their costs in September at the quickest fee since information started in 1996, in response to the Purchasing Manufacturers’ Index (PMI) from IHS Markit.

Manufacturers are additionally placing up costs as inflation as soon as once more stalks the world economic system.

Inflation hit 3.2pc in August and is broadly anticipated to surge previous 4pc by the finish of the yr in a headache for Chancellor Rishi Sunak.

HGV disaster 

Britain is struggling to ship good and transfer gadgets die to a scarcity of drivers. Large numbers have retired and a few have returned to the EU as a result of of covid and Brexit. 

The Government has set out an motion plan over the weekend to deal with lorry driver shortages, at the moment operating at 100,000 in the UK and 400,000 on mainland Europe.

It will see 5,000 momentary visas made obtainable to overseas HGV drivers, whereas a £10million expertise plan will assist prepare 4,000 extra truckers.

This week sources claimed solely 27 drivers had utilized for a brand new visa – however Boris Johnsons insisted it was 127. At the identical time, tens of 1000’s of Britons had been unable to take HGV driving classes and exams throughout the lockdowns, which implies the UK has missed out on a technology of expert recruits.

Cost of supplies

Wholesale gas costs have soared to file highs throughout Europe whereas the value of oil has virtually doubled in the previous yr to shut to $83 a barrel – the costliest since 2018.

Copper has jumped by greater than a 3rd over the previous yr which, when mixed with the scarcity of semiconductors, will bump up the costs of electrical merchandise. And cotton has additionally spiked above $1 a pound for the first time in additional than a decade, rising greater than 42pc over the previous yr, which might imply dearer garments.

Even arabica espresso has jumped virtually 73pc over the previous yr to ranges not seen since 2014, which means Britons might quickly be feeling the pinch when visiting their native cafe.

Disrupted world provide chain 

The price of bringing in container hundreds of supplies, together with festive merchandise, from China has soared this yr.  There has additionally been a serious concern with containers being caught in Europe moderately than in Asia as transport was disrupted by covid. It implies that UK firms are struggling to get merchandise made and shipped simply with lengthy ready instances.   

Food shortages 

Farms are pouring milk down the drain at the identical time as McDonald’s and supermarkets can’t get supplies on account of the lorry driver scarcity.

There should not sufficient tanker drivers to gather milk from farms, whereas the dairies have too few supply drivers to move supplies to excessive streets.

At the identical time, farmers are complaining {that a} continual lack of employees to choose and pack crops means recent produce is being left to rot in the fields.

Supermarkets are having to focus on transferring recent merchandise moderately than many dry items as a result of of a scarcity of vehicles.  

Pig farmers have began culling livestock amid warnings from meals corporations the drastic measures will hit key elements.

Meat trade leaders say a scarcity of expert butchers means abattoirs are refusing to just accept pigs for slaughter, resulting in fewer pork merchandise and lowered selection.

This is predicted to hit supplies of gammons and pigs in blankets in the run-up to Christmas.

The National Pig Association (NPA) and National Farmers’ Union (NFU) are warning that tens of 1000’s of pigs – presumably 120,000 – might need to be culled on farms and incinerated.

Labour shortages 

Businesses have complained about difficulties recruiting employees from HGV drivers to baristas and warehouse employees.

But newest figures present unemployment stood at 1.55million at the finish of July.

That was earlier than the finish of the furlough scheme this month which analysts believed might have put as many as 250,000 on the dole queue.

Critics say bosses have come to depend on uncontrolled migration from Europe offering a stream of low-cost labour and will as an alternative increase wages to fill employees shortages. 

 

Gas costs in Britain are carefully linked to Europe’s provide from Russia as a result of the UK now solely will get round 50 per cent of its supplies from North Sea fields. Prices are rising amid claims Moscow is intentionally withholding supplies whereas the quantity of gas in storage in Britain is low as a result of of an extended winter. 

Electricity costs are additionally rising, not helped by the quantity generated from renewables dropping on account of low winds and a poor summer time for sunshine. 

Britons might see their vitality payments rise by 30% subsequent yr, analysts have mentioned, as suppliers are predicted to ‘fall like dominoes’. 

Research company Cornwall Insight has predicted additional unstable gas costs and the potential collapse of much more suppliers might push the vitality value cap to about £1,660 in summer time. The forecast is roughly 30% larger than the file £1,277 value cap set for winter 2021-22, which commenced at the begin of October.

Joe Malinowski, founder of TheEnergyShop.com, warned of a ‘gas invoice explosion’, including: ‘As issues at the moment stand, we’re headed for an additional enhance of no less than £500. If issues do not cool down quickly, will increase of £600, £700 and even £800 can’t be dominated out.’

Customers of small vitality corporations might face even larger will increase if their provider fails. Mr Malinowski warned that ‘vitality suppliers are falling like dominos’ and with out political motion ‘the end result will likely be horrible for customers’. 

Britain is going through a bleak winter of hovering vitality prices, with gas costs rising by a staggering 37 per cent in a single day and pushing extra vitality corporations to the brink of collapse whereas the National Grid warned of electrical energy shortages as the nation faces its worst disaster since the first Covid outbreak final yr.

While Boris Johnson disregarded the disaster and used his Manchester Tory convention speech to set out his imaginative and prescient for a ‘excessive wage, excessive expert, excessive productiveness’ economic system, the value of wholesale gas surged by £1 a unit to 400p per therm this morning – up 37 per cent in a day and 600 per cent larger than the begin of 2021.

Prices reversed course hours later, sending the UK contracts again to £2.87, after Russian President Vladimir Putin sought to stabilise the gas market by saying that state-backed monopoly exporter Gazprom might enhance supplies to Europe. Critics accused Mr Putin of attempting to stave off allegations that Moscow is attempting to ‘weaponise’ gas supplies amid tensions between Russia and NATO powers over Ukraine.   

Toilet paper and meals packaging may very well be hit by hovering vitality prices as corporations prohibit manufacturing to guard their funds, trade bosses have warned.

The chief of the Confederation of Paper Industries referred to as for a ‘momentary winter price containment measure’ to assist firms in the sector with prices going ‘via the roof’.

And the UK’s ceramics sector mentioned some companies may very well be pressured to close down manufacturing on account of excessive vitality prices.

The warnings got here after wholesale gas costs surged to a file excessive on Wednesday, though they dropped again after Russian President Vladimir Putin mentioned the nation would stabilise the market.

Andrew Large, director-general at the Confederation of Paper Industries, mentioned its members are being ‘affected very, very severely’ by the price will increase.

He instructed BBC Radio 4’s Today programme: ‘They’re seeing their prices go up via the roof.

‘It’s damaging their profitability and in some circumstances it is inflicting them to handle their manufacturing charges in order to not expose themselves to the very, very highest prices.’

He mentioned there is no such thing as a cap on enterprise vitality prices and urged a ‘momentary winter price containment measure to attempt to put a lid on these prices in order that these very, essential industries for British society are going to have the ability to proceed to function’.

Mr Large mentioned the price rises had been impacting a range of necessary sectors, together with meals packaging, rest room tissue and the manufacturing of sterile medical packaging.

Laura Cohen, chief govt of the British Ceramic Confederation, instructed the BBC that vitality costs are affecting the viability of corporations.

She mentioned: ‘As the excessive pricing extends, extra members are more likely to be pressured to cease manufacturing on account of uneconomically larger vitality prices.

‘But we’re additionally involved the costs replicate the market’s views about the bodily availability of gas over the winter.

‘In the occasion of nationwide provide shortfall, our members are close to the entrance of the queue to be pressured off the gas community whereas households are final, and this will occur at very quick discover.

‘A pressured fast shutdown runs a really excessive threat of extreme harm to brick kilns, which might be 100 metres lengthy, working over 1,000C, and that may threaten enterprise viability.’

Rising vitality prices are additionally anticipated to hit on a regular basis Britons, with analysts predicting payments might rise by 30% subsequent yr.

Research company Cornwall Insight has predicted additional unstable gas costs and the potential collapse of much more suppliers might push the vitality value cap to about £1,660 in the summer time.

The forecast is roughly 30% larger than the file £1,277 value cap set for winter 2021-22, which commenced at the begin of October.

Craig Lowrey, senior marketing consultant at the agency, mentioned: ‘With wholesale gas and electrical energy costs persevering with to achieve new information, successive provider exits throughout September 2021 and a brand new degree for the default tariff cap (£1,277 for a typical twin gasoline direct debit buyer) for winter 2021-22, the GB vitality market stays on edge for recent volatility and additional consolidation.’

Energy regulator Ofgem opinions the value cap each six months, and adjustments it primarily based on the price suppliers pay for his or her vitality, price of insurance policies and working prices, amongst different issues.

In an announcement to the BBC, Ofgem acknowledged it was a ‘worrying time for many individuals’.

The regulator added: ‘The vitality value cap covers round 15 million households and can be sure that customers do not pay greater than is completely crucial this winter.

‘However, if world gas costs stay excessive, then after we replace the value cap sadly the degree would enhance.

‘Any buyer frightened about paying their vitality invoice ought to contact their provider to entry the vary of assist obtainable.’

Consumers will likely be higher insulated from erratic gas costs as wind and solar energy begin offering extra vitality to the UK’s households, the Business Secretary has insisted.

Kwasi Kwarteng mentioned that by decarbonising the UK’s energy provide, the Government would be sure that households are much less weak to swings in fossil gasoline markets.

“The UK so far, as many of you know, has made great progress in diversifying our energy mix. But we are still very dependent, perhaps too dependent, on fossil fuels and their volatile prices,” he instructed a convention organised by commerce physique Energy UK.

Earlier this month the Prime Minister introduced plans to deliver ahead by 15 years the goal to decarbonise the manufacturing of electrical energy in the UK.

By 2035 all electrical energy offered to the grid will likely be from wind energy and different applied sciences reminiscent of hydrogen and capturing carbon, Boris Johnson mentioned.

On Thursday Mr Kwarteng mentioned this pledge would assist households’ wallets in addition to lowering their carbon footprint.

“Our homes and businesses will be powered by affordable, clean and secure electricity generated here in the UK, for people in the UK,” Mr Kwarteng mentioned.

“Relying on homegrown power generation will protect consumers from gas price fluctuations.

“And it can, in the future, deliver down payments. We will use the wealth of Britain’s pure sources to ship cleaner, cheaper energy.”

Mr Kwarteng was speaking after the price of gas spiked in recent weeks. On Wednesday they hit new record highs, but fell again after Russian President Vladimir Putin hinted he might send more gas to Europe.

The prices have driven many businesses to bankruptcy, and energy suppliers that are having to sometimes sell gas for less than they buy it are finding it impossible to continue.

Earlier this week Omni Energy warned customers it is likely to become another casualty in the energy sector.

According to The Guardian, it told customers: “The price of wholesale vitality is constant to rise and with out important change in the wholesale price of vitality, or a Government intervention, it’s extremely probably Omni Energy will stop buying and selling earlier than the finish of November.”

Stock ranges at Britain’s petrol stations recovered to a median of 25% on Sunday, new figures present.

Why is Putin’s £8.1bn Nord Stream 2 gas pipeline so controversial?

48878035 10067779 image a 10 1633606265365

The Nord Stream 2 gas pipeline is set to double Russia’s natural gas shipments to Germany, Europe’s largest consumer of gas, bypassing Ukraine and depriving the EU member state of essential gas transit fees of $1.5 billion per year. 

Russia is already the second-largest supplier of gas to the EU behind Norway, and the £.8.1billion will increase Europe’s energy dependence on Russia and Moscow’s geopolitical clout.

Donald Trump was opposed to the project and the EU has yet to sign off on it.

But over the summer officials in Washington and Berlin reportedly reached an agreement that would allow the Nord Stream 2 pipeline – which was roughly within 62 miles of completion as of June – to finish construction.

U.S. officials under Presidents Obama and Trump opposed the pipeline, arguing it would strengthen Moscow’s influence across Europe. 

Nord Stream already includes one pipeline running from Russia to Germany. Both are owned by a company whose majority shareholder is Russian state gas company Gazprom. 

But there was ‘significant regional variation’ ranging from just 16% on average in the South East to 35% in Scotland, the Department for Business, Energy and Industrial Strategy (BEIS) said.

Average stock levels sank to a low of 15% on Saturday September 25, the day after panic buying began.

They were typically at around 33% before the crisis began.

On Friday September 24, fuel sales were up 80% compared with normal levels.

Sales remained ‘substantially above’ average until the middle of the following week when they ‘began to trend back to normal levels’, BEIS added.

The amount of fuel delivered to petrol stations was ramped up following shortages.

The average amount increased from around 16,000 litres a day per filling station before the crisis to a high of 22,700 litres on Tuesday September 28.

Gordon Balmer, executive director of the Petrol Retailers Association, said on Wednesday that 13% of independent filling stations in London and the South East still do not have fuel.

He warned: ‘This is leaving some motorists continuing to feel insecure about fuel availability at their local neighbourhood filling stations.

‘Independent forecourts report a complete lack of visibility as to when their next delivery might arrive, and some have been dry for four days and still waiting for a delivery.’

Mr Balmer claimed attempts by the Government to deal with the crisis – such as deploying members of the armed forces to help deliver fuel – have only had ‘limited success’ in London and the South East.

He added: ‘Much more attention on this issue affecting this region is urgently needed.’

On a day of worsening news, National Grid’s chief executive John Pettigrew told the FT that Britain will face tighter electricity supplies this winter due to a lack of capacity in the system and a colder winter predicted, which means the cost of electricity will increase as gas prices spike to record high.  

Investment experts Moody’s also warned that more UK energy firms will go to the wall, which will push hundreds of thousands of people on to more expensive tariffs with new providers. While Britain’s Energy Intensive Users Group, which represents steel, chemical and fertiliser firms, said production at some plants is already being halted ‘at times of peak demand’ due to energy prices. They have called on the Government to give financial support to keep businesses in the way a taxpayer-funded deal to curb CO2 shortages was done to keep two fertiliser plants running last month.

No fuel at this Shell in Reading as the petrol crisis continues two weeks on with shortages now mainly in the south and London

No fuel at this Shell in Reading as the petrol crisis continues two weeks on with shortages now mainly in the south and London

Milk is discarded on a farm in Shropshire as a lack of tanker drivers means it has to be poured away

Milk is discarded on a farm in Shropshire as a scarcity of tanker drivers means it must be poured away

Gas Q&A: Why am I paying more for energy what can be done if my fixed deal ends? 

Why are energy firms having to pay more?

Demand for wholesale gas has soared as economies recover from the pandemic, while supply has been squeezed, pushing up prices. 

The UK imports much of its gas from the EU, Norway and Russia. We have become more reliant on gas after a series of disruptions.  Last month a fire in Kent knocked out a cable bringing electricity from the continent. Wind levels have also been lower than usual.

How will it affect my bills?

With energy suppliers paying record prices for gas, firms are passing on the extra cost. 

Many have pulled cheap fixed deals and are hiking existing customers’ monthly direct debits. 

Those on a fixed deal should not see bills increase unless they start using more energy or their supplier goes bust. 

But once their tariff ends they will be moved on to a far more expensive standard variable tariff. 

Prices are capped by Ofgem at £1,277 a year for the average household, but this is likely to increase significantly in April.

What should I do if my fixed deal ends?

Experts are urging households not to panic and lock themselves into costly fixed deals. 

Ordinarily, standard variable tariffs are among the priciest on the market and experts would urge customers to switch to a new fixed deal. 

But today some fixed deals are £700 more expensive than the default deal offered by suppliers. So the best option may be to sit tight.

What should I do if my supplier goes bust?

Twelve energy companies have already ceased trading this year and dozens more could follow. 

Smaller suppliers are most at risk as they do not buy their energy as far in advance, so have been hit harder by rising costs. 

If a supplier does goes bust, customers will not lose power. Ofgem will appoint a new supplier to take over the accounts and customers will be moved on to its standard variable tariff. 

Households affected should take meter readings ready for their new supplier. 

Any credit balances will be refunded, but this could take months.

How will businesses be hit?

UK businesses which need gas to heat their offices or manufacture goods face hefty bill hikes. 

Steel, fertiliser and chemical plants, which rely on high energy consumption, have warned they may not be able to operate as normal this winter without emergency help. 

Businesses hit with higher costs could be forced to pass these on to consumers.

What is being done?

The price cap will protect families for now. But experts believe it could be raised significantly in April as it is preventing suppliers from making enough to cover costs. 

Joe Malinowski, of comparison site TheEnergyShop, warned an increase of £800 cannot be ruled out. 

The Department for Business, Energy and Industrial Strategy said Business Secretary Kwasi Kwarteng is in ‘regular contact with Ofgem’ and with suppliers ‘to understand the challenges they face’.

 

The explosive rise that will hit households and businesses is being fed by fears that a cost of living crisis has arrived as global oil prices also jumped to a three-year high of $83 a barrel. And as a result new figures show average petrol prices have hit 136.10p per litre, the highest level since September 2013. 

Despite all this, the Prime Minister gave only a cursory mention of the crisis rocking Britain and merely indicated there are ‘difficulties’ to come – instead giving a rambling keynote speech to the Tory faithful at the party conference which was instead packed with jokes and almost entirely devoid of new policies. 

Business leaders slammed Mr Johnson’s speech, with the Confederation of British Industry warning that his economic policies could stoke inflation while the British Chambers of Commerce accused him of failing to provide firms with urgent answers ‘to the problems they are facing in the here and now’. 

Trade union leaders also lined up to condemn Mr Johnson. Unite’s new general secretary Sharon Graham raged: ‘Without serious action, this speech is nothing more than headline-chasing by a prime minister desperate to deflect from the serious and growing cost-of-living crisis happening on his watch.’ 

Manuel Cortes, general-secretary of the TSSA transport union, added: ‘As ever, this political jester came up with nothing but hot air.’ Another critic said: ‘Britain burns while Johnson fiddles’. 

Even Thatcherite think-tanks denounced the speech. Matthew Lesh of the Adam Smith Institute said: ‘Boris’ rhetoric was bombastic but vacuous and economically illiterate. Shortages and rising prices simply cannot be blustered away with rhetoric about migrants.’ 

Mark Littlewood of the Institute of Economic Affairs added: ‘Unnecessarily restricting the supply of labour may lead to wage increases, but these will be passed on in price increases. A strategy to make things more expensive will not create a genuinely high wage economy, merely the illusion of one.’ 

Business leaders slammed Mr Johnson’s speech as Lord Wolfson, CEO of Next and a Brexiteer Tory life peer, warned of ‘real panic and despondency’ in the restaurant, hotel and care industry because of a lack of staff. When asked about the Government’s feeling that British business needs a ‘shock’ to get it off its reliance to foreign labour and retrain Britons to do the jobs, Lord Woolfson said: ‘That approach leads to queues at petrol stations and pigs being unnecessarily shot’.   

With inflation rising, nearly two-thirds of UK manufacturers expect to raise their prices in the run-up to Christmas after being hit by mounting cost pressures, the British Chambers of Commerce has said. And just as Mr Johnson denied the country had fallen into chaos, investors singled out the £2trillion gilt market to sell Government bonds – a sign the markets are gloomy about the UK’s economic outlook.   

Labour party chairwoman Anneliese Dodds said the Prime Minister’s speech was ‘vacuous’ and that he ‘talked more about beavers than he did about action to tackle the multiple crises facing working people up and down the country’. SNP Westminster leader Ian Blackford thundered: ‘For all the waffle and deflection, the prime minister cannot escape the fact that millions of families are poorer and worse off as a direct result of his government’s damaging policies.’   

The price of gas reached a record 400p per therm yesterday morning – up 100p in 24 hours – before dropping again to 377p. Reuters reported that prices dropped this afternoon after Vladimir Putin gave a statement that Russia would gas supplies to Europe via Ukraine. 

The shocking gas price increase came amid growing concerns about supplies from Russia and predictions of a cold winter in Europe that pushed the market price up by a fifth in 24 hours. The price was 277p at the close on Monday, 150p a month ago and below 50p from February to May.  Critics have questioned whether Russia is squeezing the market in a plan to make more money all executed by Moscow, using Gazprom, the state-owned gas firm.

Tom Marzec-Manser, an analyst at ICIS, said: ‘This is just ridiculous. Almost impossible to even justify or qualify how and why it’s moving so fast and so high.’ Phil Hewitt of EnAppSys, the consultancy, said: ‘This (gas) price level is currently the price for the whole of winter. This is extreme pricing’.  ‘An energy crisis is unfolding with winter in the northern hemisphere still to begin,’ said Stephen Brennock of PVM brokerage  

Boris Johnson yesterday insisted Margaret Thatcher would also force tax hikes on the country to pay for the NHS and social care - as he faced down business fury over supply chain chaos as critics said his speech was 'bluster' and 'economically illiterate'

Boris Johnson yesterday insisted Margaret Thatcher would also force tax hikes on the country to pay for the NHS and social care – as he faced down business fury over supply chain chaos as critics said his speech was ‘bluster’ and ‘economically illiterate’ 

Boris Johnson mentioned he would unleash the ‘distinctive spirit’ of the nation as he set out on the ‘tough’ course of of reshaping the British economic system.

Now Council Tax is forecast to rocket: Homes may face 5% increases for the next three years to pay for social care reforms 

Council task could rise by up to five per cent each year for the next three years in order to pay for long awaited social care reforms.

The Institute for Fiscal Studies (IFS), a think-tank, warned that under current Government spending plans, a rise of at least 3.6 per cent would be needed each year just for town halls to keep services running at pre-pandemic levels.

However, researchers said this would likely be a minimum requirement, with extra costs and demand potentially pushing bills to rise by up to five per cent each year until 2024/25.

IFS said that social care reforms announced by the Government last month are underfunded and would cost £5billion annually in the long term – almost three times the additional funding so far allocated over the next three years.      

The stark warning comes in a pre-released chapter of the IFS green budget, the rest of which will be launched closer to the planned Budget and spending review later this year. 

‘The Government has stepped up with billions in additional funding for councils to support them through the last 18 months, it is likely to have to find billions more for councils over the next couple of years if they are to avoid cutting back on services, even if they increase council tax by four per cent a year or more,’ Kate Ogden, a research economist at IFS and an author of the chapter, said.

 

The Prime Minister used his Conservative Party conference speech to say he has the ‘guts’ to reshape society, addressing issues which had been dodged by previous administrations.

With shortages of lorry drivers and other workers hitting supply chains, leading to empty shelves and queues at petrol stations, Mr Johnson defended his strategy of restricting the supply of cheap foreign labour after Brexit.

And despite a looming National Insurance rise for millions of workers in April to fund a £12 billion annual investment in health and social care, Mr Johnson insisted his new approach would ultimately create a ‘low-tax economy’.

‘That’s the direction in which the country is going now – towards a high-wage, high-skilled, high-productivity and, yes, thereby a low-tax economy. That is what the people of this country need and deserve.

‘Yes, it will take time, and sometimes it will be difficult, but that is the change that people voted for in 2016.’

Setting out the need for the health tax hike, Mr Johnson said: ‘We have a huge hole in the public finances, we spent £407 billion on Covid support and our debt now stands at over £2 trillion, and waiting lists will almost certainly go up before they come down.

‘Covid pushed out the great bow wave of cases and people did not or could not seek help, and that wave is now coming back – a tide of anxiety washing into every A&E and every GP.

‘Your hip replacement, your mother’s surgery … and this is the priority of the British people.’

The rising tax burden has caused concern among the Tories, but Mr Johnson told activists in Manchester: ‘I can tell you – Margaret Thatcher would not have ignored the meteorite that has just crashed through the public finances.

‘She would have wagged her finger and said: ‘More borrowing now is just higher interest rates, and even higher taxes later.”

The 44-minute keynote address came as the Government implemented its £20-a-week cut in universal credit as the temporary uplift in the benefit over the pandemic ended.

Mr Johnson used his speech, which was largely devoid of major policy announcements, to spell out what his ‘levelling-up’ agenda means.

‘The idea in a nutshell is you will find talent, genius, care, imagination and enthusiasm everywhere in this country, all of them evenly distributed – but opportunity is not,’ said Mr Johnson.

‘Our mission as Conservatives is to advertise alternative with each software now we have.’

More UK energy suppliers set to fail as wholesale prices soar leaving consumers with rocketing bills

Britain’s retail energy sector will see more failures from suppliers and increased market consolidation due to a sharp rise in wholesale energy prices, rating agency Moody’s said.

The sector faces pressures on profitability and an increased risk of credit negative political intervention, the agency added.

Nine British energy suppliers ceased trading last month alone. Smaller suppliers with less capital are struggling amid record wholesale power and gas prices across Britain and Europe, while price caps prevent the full rises from being passed on to consumers.

Experts believe that if gas prices remain at around this level, which is now predicted, the average household energy bills could jump by as much as a third or £420 to almost £1,700 a year from April. Today the cheapest fixed gas and electricity deal available in the UK is £1,700 – a month ago it was £1,177.     

Ofgem will automatically move customers when companies go to the wall. But energy market rules demand that customers whose supplier goes bust must be offered a fair deal by the new supplier – not the same one they had – meaning they are likely to pay significantly more. 

‘More (failures) will follow with Renewable Obligation payments due in October,’ Moody’s said.

British ministers are also looking at a range of options to help companies such as National Grid Plc (NG.L), Centrica Plc (CNA.L), EDF (EDF.PA) that have taken on a flood of customers from failed suppliers. 

Profitability at those firms will be affected until higher prices are passed on to customers, Moody’s said.  

Families who have already endured Covid-related uncertainty over last 18 months face a triple-blow of rising energy bills, soaring food prices and incoming tax hikes all fuelling inflation. Experts also predict that interest rates may rise faster than predicted to combat inflation, pushing up the price of mortgages and other borrowing. 

Exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) reveals how inflation will cost the typical family of four an extra £1,800 by the end of this year, while a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900.

Meanwhile, a Money Mail poll reveals that one in two households have already started making cutbacks due to concerns over the rising cost of living. 

But while many Britons are fear a financial hit, Prime Minister Boris Johnson yesterday insisted that he is not worried about rising prices because he believes they will be temporary, and insisted it is ‘not his job’ to fix every aspect of supply chains in the UK.   

Asked about the situation during the Conservative Party conference, he told the BBC yesterday: ‘Actually I think that people have been worried about inflation for a long time and it hasn’t materialised.’

When pressed on the UK’s HGV driver shortage he attempted to deflect attention back to the private sector, saying ‘it’s not the job of government to come in and try and fix every problem in business and industry’. 

Referencing Margaret Thatcher’s 1980s dictum – which ironically she used to stress the need to control inflation in a market economy – Mr Johnson said: ‘In a famous phrase, there is no alternative. There is no alternative.

‘The UK has got to – and we can – do much, much better by becoming a higher-wage, higher-productivity economy.’

But he admitted that Christmas might only be better from a ‘low base’ amid fears of ongoing shortages – after it was effectively cancelled during the pandemic last year.

Furious business chiefs accused the Prime Minister of ‘buck-passing’, while cabinet ministers told MailOnline they were concerned about ‘complacency’ creeping in over inflation.  

In a stark warning of the bumpy road ahead this winter, the Bank of England has already flagged that inflation could hit 4 per cent by the end of the year, while supermarkets say food prices could increase by 5 per cent. 

The energy price cap has now also increased, pushing up bills for more than 15 million households by an average of close to £140 a year.

And the soaring cost of wholesale gas has seen many suppliers go bust – forcing millions of customers on cheap deals onto more expensive tariffs linked to the price cap.

Meanwhile, new figures show pump prices have hit 136.10p per litre, the highest level since September 2013. 

As living costs soar across the country, consumer polls suggest as many as half of Britons have already started cutting back, fearing they may have to penny-pinch now in order to save up for what could be a pricey Christmas.

Others have started shopping early – hoping to beat the price rises – with Aldi’s already selling 1,500 frozen turkey crowns a day, while Christmas pudding sales are up 45 per cent.  

A survey, carried out by Consumer Intelligence, found many had started to scale back spending within the last one to three months — with most fearing rising food and energy prices. 

Meanwhile, analysis of price rises in the last year alone shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10, the price of a pint of beer is creeping close to £4 and a bottle of prosecco has risen 55p to £8.

The new month of October also marked the end of the furlough salary support scheme as well as the withdrawal of an extra £20-a-week for struggling households receiving Universal Credit.

Boris Johnson defied rising panic over inflation and supply chain chaos as he vowed to push on with tax rises and ‘Levelling Up’ wages.

In a rambling keynote speech to the Tory faithful that was littered with jokes but short on detail, the PM admitted there are ‘difficulties’ to come.

However, swiping at David Cameron and Theresa May, he insisted there will be no more ‘drift and dither’ about fundamental reform of the country – arguing that was what people voted for in the 2016 referendum.

He said businesses must not be allowed to use cheap immigrant labour as an ‘excuse for failure to invest in people, in skills and in the equipment the facilities the machinery they need to do their jobs’. 

Dismissing criticism over huge tax hikes to bail out the NHS and social care, Mr Johnson said his predecessor Margaret Thatcher would not have kept borrowing after the ‘meteorite’ of the pandemic left national debt over £2trillion. 

He also summoned the spirit of Churchill and US Open tennis champion Emma Raducanu as he spelt out his determination for Britain to be a ‘trailblazer’.

But the address came amid an increasingly grim economic backdrop, with warnings that more energy suppliers face going bust as natural gas costs spiked by another 40 per cent.

The UK’s government’s borrowing costs rose to the highest level since May 2019, as markets took fright at the prospect of inflation going even higher. 

In further worrying signs, the latest PMI figures suggested the economy recovery stalled last month – with the construction sector barely growing at all.  

Meanwhile, the CBI warned that the premier’s determination to drive up wages would put the country on a ‘pathway to higher prices’ unless he has comes up with a way to boost productivity.   

In the only crumb of policy, Mr Johnson announced a £3,000 ‘Levelling Up’ premium for talented maths physics chemistry teachers to go and work in deprived areas. 

He did try to soothe anxiety in Tory ranks by saying he wanted there to be ‘low tax’ in the longer term, as well as promising not to ‘jam’ homes in the South East and to fight ‘woke’ historical revisionism. 

But the PM is facing growing unrest over his blunt denial that the country is in ‘crisis’ with petrol stations running dry, spiking inflation and labour shortages. 

Amid warnings that millions of families with struggle to make ends meet this Christmas, he has argued it is ‘not his job’ to ‘fix’ all the problems for industry. 

Mr Johnson told party members his changes to the economy after Brexit will at times be ‘difficult’ but insisted they will result in a fairer ‘low tax’ system. 

He said: ‘That’s the direction in which the country is going now – towards a high-wage, high-skilled, high-productivity and, yes, thereby a low-tax economy. That is what the people of this country need and deserve.

‘Yes, it will take time, and sometimes it will be difficult, but that is the change that people voted for in 2016.’

He added: ‘To deliver that change we will get on with our job of uniting and levelling up across the UK – the greatest project that any government can embark on.’ 

Mr Johnson opened by telling the party faithful he was pleased to be back ‘cheek by jowl’ and the country had opened up ‘faster than any other major economy in the world’. 

He said that was down to the ‘unbeatable’ NHS – and referred to his experience in hospital as his life hung in the balance.

Mr Johnson set out the scale of the challenge the country faces, with warning that NHS waiting lists will ‘go up before they come down’ as the end of the pandemic unleashes ‘a tide of anxiety’ about health concerns. 

Carrie Johnson gave her husband a good luck kiss before he delivered his leader's keynote speech during the Conservative Party conference at Manchester Central Convention Complex. Mrs Johnson is expecting her second child with the PM

Carrie Johnson gave her husband a good luck kiss before he delivered his leader’s keynote speech during the Conservative Party conference at Manchester Central Convention Complex. Mrs Johnson is expecting her second child with the PM 

Mr Johnson admitted reforming the economy could be 'difficult', but hardly referred to supply chain carnage that have been causing empty shelves in some supermarkets (pictured in Ely)

Mr Johnson admitted reforming the economic system may very well be ‘tough’, however hardly referred to produce chain carnage which were inflicting empty cabinets in some supermarkets (pictured in Ely) 

Boris woos maths, physics  and chemistry teachers to deprived areas with £3,000 salary ‘premium’

Boris Johnson attempted to woo the country’s top science and maths teachers to some of the most under-achieving areas.

The Prime Minister used his party conference speech in Manchester to unveil plans for a £3,000 ‘premium’ for educators to take on challenging pupils.

He spoke of the wildly differing life chances in areas of the country that are often close to each other. 

He branded it ‘an appalling waste of potential that is holding this country back’. 

The Prime Minister explained to Tory delegates his drive to ‘level up’ the country, saying: ‘The idea in a nutshell is you will find talent, genius, care, imagination and enthusiasm everywhere in this country, all of them evenly distributed but opportunity is not. 

‘To level up, on top of the extra £14 billion we’re putting into education, on top of the increase that means every teacher starts with a salary of £30,000, we’re announcing a levelling-up premium of up to £3,000 to send the best maths and science teachers to the places that need them most.’ 

 

He said he would govern for ‘the NHS nurses and the entrepreneurs’, making clear that ‘structural change’ is the way forward.  

Mr Johnson said a ‘tide of anxiety’ is washing into A&E departments and GP practices, as he defended his multi-billion pound tax hike to pay for NHS and social care.

He recalled lying in a hospital bed last year and seeing a hole in the ground, noting: ‘They seemed to be digging a hole for something or indeed someone, possibly me.

‘But the NHS saved me and our wonderful nurses pulled my chestnuts out of that Tartarian pit, and I went back on a visit the other day and I saw that the hole had been filled in with three or four gleaming storeys of a new paediatrics unit.

‘There you have a metaphor for how we must build back better now. We have a huge hole in the public finances, we spent £407billion on Covid support and our debt now stands at over £2 trillion, and waiting lists will almost certainly go up before they come down.

‘Covid pushed out the great bow wave of cases and people did not or could not seek help, and that wave is now coming back – a tide of anxiety washing into every A&E and every GP.

‘Your hip replacement, your mother’s surgery and this is the priority of the British people.’

Mr Johnson’s speech was affected by jokes, together with one about Michael Gove’s dancing in an Aberdeen nightclub.

Government borrowing costs soar after gas costs spark inflation alarm

The government faces higher borrowing costs as investors take fright at the spectre of inflation.

The 10-year gilt yield hit its highest level since May 2019 at 1.152 per cent on Wednesday.

The spike came as the day price of British wholesale gas contracts soared again.  

Peter Chatwell, head of multi-asset strategy at Mizuho International, said there were mounting concerns that the Bank of England will need to raise interest rates sooner.

‘This all comes down the repricing which is taking place at the very front end of the curve – so the possibility of a hike in just under a month’s time,’ Mr Chatwell said.

‘That’s the difficult thing for the market and that’s why it is linked to very near term developments in energy prices.’ 

‘Let’s here it for Jon Bon Govey,’ the Prime Minister told the conference hall.

He continued: ‘How have we managed to open up ahead of so many of our friends?

‘The answer is because of the rollout of that vaccine, a UK phenomenon, the magic potion invented in Oxford University … distributed at incredible speeds to vaccination centres everywhere.

‘We vaccinated so rapidly that we were able to do those crucial groups one to four, the oldest and most vulnerable, faster than any other major economy in the world.

‘Although the disease as sadly not gone away, the impact on death rates has been astonishing.’

He urged those present to ‘get’ a jab and invited them ‘try’ a so-called ‘fist pump’ with their neighbour. 

The Tories have been holding their first in-person conference since the 2019 general election, after the pandemic wreaked havoc on normal life.

But the proceedings have been largely dominated by events elsewhere, with petrol stations running dry and worries about labour shortages in crucial sectors causing months of misery. 

Cabinet ministers are behind the premier on the need to push ahead with change, although they admit that 

But there is increasing unrest about huge tax rises being brought in to bail out the NHS and social care. 

Senior figures also fear ‘complacency’ over inflation – on track to hit double the Bank of England’s 2 per cent target – despite Mr Johnson saying he is not ‘worried’ about it. 

No formal announcement is expected on the national living wage, but there are reports it will be lifted by 5 per cent to £9.42 within weeks. 

CBI director general Tony Danker warned that Mr Johnson had failed to give any detail of how he would achieve his ‘vision’.

‘Ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices,’ he said.

‘It’s a fragile moment for our economy. So, let’s work in partnership to overcome the short-term challenges and fulfil our long-term potential. It’s time to get around the table, roll up our sleeves and get things done. It’s time to be united.’  

What are the higher costs coming down the track for Britons over the coming years? 

National insurance rise – from April 

The rates of national insurance are due to be pushed up by 1.25 percentage points from April, in a move that will cost households hundreds of pounds. 

The move will raise £12billion a year, which will initially go on bailing out the NHS and clearing backlogs after the pandemic. However, in the longer term it is meant to be used for social care.

Boris Johnson has promised that no-one will pay more than £86,000 towards their care costs. However, that does not include accommodation and some other costs, with fears of a ‘postcode lottery’ as local authorities set different rules.  

Initially the hike will look like a NI rise on pay slips, but later it will be billed a ‘health and social care levy’. 

Ministers insist it is fairer than other tax options because it falls on business as well as individuals.

To raise the equivalent amount in income tax would require an increase in individuals’ tax of 2 percentage points.

A typical basic rate taxpayer earning £24,100 will contribute £180 in extra NI in 2022/23.

A higher rate taxpayer earning £67,100 will contribute £715. For the first time, the NI will be charged on people working over the state pension age of 66.

Universal credit – £20 uplift ends 6 October 

The Government introduced a temporary £20 increase to universal credit payments in response to the pandemic in April last year, but the scheme is set to officially end on 6 October. 

Close to six million people currently claim universal credit, almost double the three million before the pandemic, with almost 40 per cent of them classed as being in employment. 

Thanks to the boost, a single person aged 25 or over has gone from earning £317.82 to £409.89 a month, a difference of £23 a week or £1,104.84 a year.

In that case, the £23 a week boost made up more than a fifth of the amount they were paid. 

Citizens Advice has warned that a third of people on universal credit will end up in debt when the uplift is removed, with the average shortfall set to be of around £50 a month. 

Research by another charity, Turn2us, has found that over half of people on universal credit will struggle to pay their bills when the cut comes into effect, with a further one in four unable to afford their rent or mortgage payments. 

‘Due to the way Universal Credit is tapered as earnings increase, it’s not just a case of people picking up an extra couple of hours of work to help fill the gap, instead they will likely have to make tough decisions about what to pay for and what to cut from the household costs,’ notes Laura Suter, head of personal finance at AJ Bell.

‘Anyone who will be hit by the cut should check they’re getting all the benefits they’re entitled too – Citizens Advice is a good first port of call for help navigating the system.’   

Thomas Lawson, chief executive at Turn2us, said: ‘The £20 per week cut to Universal Credit was already going to leave many families struggling to keep up with the cost of living. 

‘This, now combined with a sudden surge in energy prices, could spell disaster and plunge thousands more people into financial insecurity or even poverty; especially those of us whose financial resilience has been worn away by the pandemic.’

Green revolution – coming years 

Homeowners are set to be hit with a new environmental tax on gas as ministers try to force them to abandon the fuel in favour of green alternatives.

Climate change levies currently added to domestic electricity, which average £159 per year, are expected to be axed and new payments added to gas to entice people to replace their central heating boilers and cookers.

The transfer is meant to encourage the take up of warmth pumps and different electrical alternate options as they search to make the UK internet zero for carbon emissions by 2050.

Ministers insist the change will mean no overall increase to bills and could help increase the take-up of electric cars as it become cheaper to charge them at home.

However critics doubt that will be the case, and the change comes at a time when UK gas prices have hit a record high.

Mr Johnson has also pledged to make all the UK’s electricity supplies ‘green’ by 2030, although again the government argues this will cut prices for households rather than increase them. 

Stamp duty holiday – already over

The full stamp duty holiday came to an end in June, with the nil-rate band – the portion of a property purchase buyers don’t need to pay stamp duty on – reduced from £500,000 to £250,000.

The tax break, which saved buyers up to £15,000 on their house purchases up until then, was cut back, with the maximum saving currently capped at £2,500. 

But from the 1 October, that went too, as the nil-rate band will revert to the normal £125,000.

Stamp duty has been blamed for pushing house prices higher over the past year, with many experts anticipating a drop in demand, and hence prices, after its end. 

And demand did indeed fall off a cliff between June and July, with the number of property transactions plummeting by 63 per cent, according to official figures from HMRC. 

But many believe prices will hold up well in the coming months thanks to cheap mortgages and demand continuing to be driven by people looking to relocate to larger homes in the countryside in the wake of the pandemic.

‘While there is likely to be a surge of property purchases pushed through before the deadline and a small drop in the month after, the early signs are that the property market isn’t headed for a large crash – particularly while borrowing is still so extraordinarily cheap,’ Suter said.

VAT reduction – already over  

The reduced VAT rate on food and soft drinks for hospitality businesses was introduced during the pandemic to help out struggling pubs and restaurants, and has been extended a couple of times. 

However, it will now come to a close at the end of the month – and could see businesses hike prices to customers.

On 30 September 2021 the current 5 per cent reduced rate will rise to 12.5 per cent, which will last until 31 March 2022, when it will rise back to the old standard rate of 20 per cent.   

‘Many hotels and restaurants decided to keep this reduction for themselves rather than pass it on to customers, to help shore up their finances post-pandemic,’ said Suter.

‘With food and energy costs rising it has provided a cushion for businesses and may have helped them put off increasing prices. 

‘But once the rate shoots back up it will be another squeeze on margins for businesses and means we’ll probably see higher prices when going out to eat or booking a trip away.’

Energy price cap – from October 1

On prime of seeing a lot of Government assist scrapped, many households and companies are additionally going through rising vitality payments because of the energy price cap.  

Some 11 million households on their suppliers’ default energy tariffs will see an increase of £139 a year to £1,277, while bills will also increase by £153 to £1,309 a year for 4 million pre-payment meter customers.  

The increased bills will start from 1 October and last for the following six months until the cap is reviewed again.

‘Usually you’d be far better off getting off your provider’s standard variable tariff and locking in a fixed-rate deal, but the energy market is so barmy at the moment that no one is offering a fixed deal for a cheaper price than the energy cap,’ Suter says.

‘This means everyone needs to face up to rising energy bills, just as we head into the colder months.

‘If your deal has ended you need to weigh up whether you want to secure a fixed-rate deal now, at a higher cost than your current price, with the expectation that you’ll be protected from rising energy prices. 

‘Or you can stick with the energy price cap rate and gamble that recent gas price rises end soon.’

Households struggling to pay their bills can also contact their supplier or ask for help from a debt advice charity.   

Rising inflation and food costs

Inflation fears had been fuelled once more this month, when the headline CPI rate recorded its largest jump ever in August to three.2 per cent – with the Bank of England predicting it might soar above 4 per cent by the finish of the yr. 

Contributing to the rise was a jump in the price of food and drinks, partly as a result of the supply chain crisis gripping the country.

Food and non-alcoholic drink prices rose 1.1 per cent between July and August, and by 0.3 per cent over the year, according to the latest figures by the Office for National Statistics. 

The average price of a pint in the pub across the country could soon pass £4, the ONS said. 

Last year, the average household spent £277 a month on food expenses, but the latest inflation reading suggest this could increase to £285 a month this year, according to analysis by Royal London. 

‘Anyone who has been to the supermarket recently will have noticed that their weekly bill has been rising,’ said Suter. 

‘A combination of shipping issues, driver shortages, supply chain issues and a leap in demand have all lead to a spike in prices – in July we saw the largest monthly rise in food costs. 

‘While you can’t directly combat rising prices, you can reduce your food bill. There are lots of offers out there for using online grocery delivery services for the first time, which can get decent discounts on a shop. 

‘Or you can go back to the old fashioned methods of sticking to your list, meal planning and budgeting.’

 

How to survive the big squeeze: Bills and prices are soaring, but don’t panic! Here personal finance experts share top tips for making crucial savings

ByBen Wilkinsonand Amelia Murray For The Daily Mail

Back to fundamentals

After the pandemic disrupted our spending and saving habits, now is a good time to draw up a fresh household budget.

Our survey found that of those households cutting back, more than half were saving by not spending on luxuries such as eating and drinking out.

Three out of four said their cutbacks should be enough to keep them from struggling with money.

Laura Suter, head of personal finance at investment broker AJ Bell, says: ‘If you’re facing a fall in income or rising bills — or a toxic double whammy — then you need to get a grip on your finances and look at what you can afford.

‘It’s not a particularly pleasant job but it’s essential to avoid getting into financial strife further down the line. You need to look at what you have coming in, after tax, then list everything you’re spending in an average month.

‘Once you’ve listed it all, it will be clear whether you can afford your lifestyle or if you need to make cutbacks.’

Sarah Coles, personal finance analyst at investment service Hargreaves Lansdown, adds: ‘The huge benefit of having everything written down like this is you can see where you’re spending money and not getting an enormous amount out of it, which will help you identify the best ways to cut costs.’

She says you will need to identify the bills you are overpaying for. And while there aren’t many cheap energy deals at the moment, you can still save on everything from car insurance to mobile contracts and broadband packages. 

The money expert also suggests cancelling direct debits you don’t get enough out of — gym membership or subscriptions, for instance. And finally, avoid impulse purchases by waiting an hour or even a day before you buy something.

Homemade lunch saves £30 a week 

Lunching for less: Emma Thomson is making her own soups

Lunching for less: Emma Thomson is making her own soups

Emma Thomson, 32, has replaced monthly salon trips to get her nails, eyebrows and eyelashes done with doing her own treatments, saving herself £65 a month.

She has also stopped buying meal deals and juices for lunch every day, boosting her income by another £30 a week, in favour of making her own soups by the batch that last for days.

Emma, who makes personalised gifts for a living, has been hit by rising business and living costs, which is why she has had to make savings where she can.

During the pandemic she saw her import duty and postage costs increase, which prompted her to tighten the purse strings.

Emma, who lives in Essex, says: ‘There is nothing you can do about it so you just need to find ways to cut back.’

Shop low-cost 

Shoppers have been warned that food prices are going to rise thanks to the supply chain crisis.

Yet Andrew Hagger, expert at personal finance site Moneycomms, says thinking about what you spend at the supermarket can lead to big savings. 

He says: ‘Food shopping is where a lot of money is wasted — use up stuff that’s in your cupboards and freezer. 

‘Always plan your meals for the week, make a list and stick to it.’ He also suggests shopping at budget stores Aldi or Lidl.

Research by industry magazine The Grocer last month found Aldi to be the cheapest supermarket, with an average trolley of goods costing £45.12, compared to £51.32 at Asda and £70.18 at Waitrose.

Ms Coles adds: ‘We all swear by certain brands, but it’s worth downshifting at the supermarket to own-brands or budget alternatives to see if you notice the difference.

The most expensive brands will be at eye level, where you’re naturally drawn. Before you pick anything up, check the top and bottom shelf for a cheaper alternative.’

Meanwhile, Rebecca O’Connor, head of pensions and saving at Interactive Investor, says there’s money to be saved by bulk buying, explaining: ‘Always look for the cost per 100g or 1kg rather than offers like ‘three for two’.’

Sort Christmas now

There are fears that the supply backlog might mean we cannot get our hands on turkeys and Christmas presents later in the year. 

However, there are still 11 weeks to go, so you have plenty of time to get everything in order for the big day.

Ms Suter says: ‘Try to work out how much you think Christmas will cost, then you can start setting aside a small amount each week to save for presents or food.

‘Hosting Christmas and buying all the food for family can feel a bit daunting. But you can make a list of non-perishable items and, starting now, add a few to your weekly shop in the run-up to the 25th to help spread the cost.’

Ms Coles says if you start shopping now, you can save on presents: ‘Take advantage of one‑day sales. Of course, this includes Black Friday, but if you want something from a specific store, it’s worth following them on social media and joining any clubs or newsletters they offer, so you’ll find out about their flash sales, too.’

She suggests using the CamelCamelCamel online price tracker which shows you historic deals on Amazon so you can see if you are getting a genuine bargain.

She also recommends using a cashback website such as TopCashback or Quidco to make extra money when shopping as normal, and also searching the internet for discount vouchers at that particular retailer. 

Current gives embody as much as 14.45 per cent off at division retailer Harvey Nichols or as much as 25 per cent off at Currys PC World.

I’m letting a room to pay the bills 

Lodgings: Naomi Bennett has been letting out her spare room to make ends meet

Lodgings: Naomi Bennett has been letting out her spare room to make ends meet

Naomi Bennett, from South London, has been letting out her spare room to make ends meet.

And she is now considering renting out her own room and sleeping on the sofa to cover rising energy costs.

Naomi, 39, has also increased the nightly rate from £25 to £30 for her spare room.

She says she’s not a big spender — some of her clothes are a decade old — which makes it difficult to cut costs.

She says: ‘I’ve been shopping at Iceland for frozen meat to save money on fresh food. I’m not sure it is enough but I’ve cut back everywhere I can. 

‘It is worrying. I’ve also got my blankets and hot water bottles to hand so the heating doesn’t need to come on.’

Naomi, who runs a video streaming platform, has also had to take on a consultancy job to keep afloat, but it means she is now juggling both roles and working more than 60 hours a week.

She says: ‘You can’t even shop around so you have to cut costs or find extra income. I’m lucky I have a spare room and am healthy. 

‘But I worry about older people such as my dad who could get ill if they try to cut costs by turning off their heating.’

Save your vitality

The energy crisis means households can no longer save money by switching tariffs using a price comparison site.

So for now, the best way to save money on your bills is simply by using less energy.

Ms Coles suggests turning down the thermostat by one degree, not overfilling the kettle, turning appliances off rather than leaving them on standby, switching to energy-efficient LED bulbs and fitting draught-proofing to windows and doors.

By switching your thermostat off ten minutes earlier, you’ll save five hours of heating every month, or around £5, Mr Hagger says.

Ms O’Connor says her family have started batch-cooking for the week on a Sunday, when they make banana loaf cake for lunchboxes, stews and curries.

She says cooking like this will save energy on oven use if you use a microwave to reheat meals, and it will save costs on recipe book food which can involve expensive ingredients

She also recommends: ‘Some people who have traditional fires are bulk-buying wood for fires to avoid reliance on gas central heating.

‘This might be cost-effective if it means you are keeping the heating off in other rooms. Bleed your radiators and also switch them off in rooms you aren’t using and close the doors to keep heat in.’

Find a gasoline repair

The petrol crisis has made some households think twice about their car use. And our experts say savings can quickly be made by easing off on the fuel you use.

Mr Hagger says: ‘Don’t use the car for non-essential short trips — consider walking or cycling as it is cheaper and better for your health. 

If your car has an economy or efficiency drive mode then use it more. It may reduce the performance of your car but will lower your fuel costs.’

Sharing lifts to and from school or work also means you’ll save half the cost of petrol, says Ms O’Connor.

But it might be too soon to consider an electric car. Ms O’Connor says: ‘The surge in demand for electric vehicles may now be reflected in their price, so it might not be a cost-effective switch since the fuel crisis started. It may also be harder to get a good price for a petrol vehicle.’

Tightening my belt for 6 months 

Cutting back: Counsellor Sam Robertson has swapped eating out for nights in

Cutting back: Counsellor Sam Robertson has swapped eating out for nights in

Counsellor Sam Robertson has swapped eating out for nights in due to Britain’s uncertain financial future.

Sam, 47, has lived through two recessions that she says are always in the back of her mind. It is why she is being careful with her money — because of the uncertainty.

She says: ‘We used to go out for dinner once or twice a week — and we were lucky to do so. Now we may get a steak from Waitrose if it’s on offer.’

Sam, who lives in East Sussex, also doesn’t stray far from home to keep travel costs down and uses cashback site Kindred when shopping online, earning around £400 in the past few months.

She says: ‘After Freedom Day it was nice to go to the pub — but not every day. I think it will be at least six months before we can be more carefree with our spending.’

Use spare time

If you cannot bear to make any more cutbacks, you could always bring in some more money.

Ms Suter says: ‘You could use your spare time to start a side hustle. Perhaps you have a hobby or skill that you could turn into a money-making plan, or you could take on an extra job in the evenings or weekends.

‘If that doesn’t appeal then use this as an opportunity to sort out your house and sell things you no longer need. There are lots of websites that make this process pretty easy, and it can help declutter and boost the coffers at the same time.’

Rachel Springall, from finance data analysts Moneyfacts, points out that you can earn free cash by switching bank accounts.

She says: ‘At the moment, HSBC will pay £110 cash plus provide a £30 Uber Eats voucher when bank customers switch to its Advance Bank Account, plus there is no monthly fee to pay.

‘While this is very tempting, it’s important that consumers look at all the features and charges to ensure it’s the right choice for their day-to-day banking needs.’

She also suggests using the Stocard smartphone app which stores all your loyalty cards in one place so you don’t miss any points or offers.

Get free assist

There’s no shame in claiming every penny of support you are entitled to get from the Government.

Ms Suter says the charity Citizens Advice is a good place to start: ‘The benefits system is headachingly complicated to navigate, but there is lots of help you might not be accessing, like help paying energy bills in the winter or money towards childcare costs.’

Ms O’Connor adds: ‘If you are paying for childcare, are you always using the tax-free childcare scheme to pay for it?

‘Have you claimed relief for working from home during the pandemic in this year’s tax return? Are you eligible for any credits or allowances, such as Carer’s Allowance, that you aren’t claiming?’

You can find out about benefits you could receive at entitledto.co.uk.

The Government also last week announced a £500 million Household Support Fund for struggling families. The money will be available from this month in England through your local authority.

The Warm Home Discount Scheme also offers up to £140 off energy bills for struggling households.

Build a security internet

Once you have your finances in better shape, it is time to think about creating a savings safety net in case you hit hard times.

Ms Suter says: ‘If you know you’ll have spare cash each month then automatically transfer it into a savings account on payday to stop it being spent.

‘Setting a savings goal is always a good idea, whether it’s a specific amount of money or a particular thing you know you’ll need to pay for. Having a target in mind can help you get into the habit and stop you dipping into your savings pot.’

If you save routinely you can access some of the better interest rates in the savings market by opening a regular saver account. 

The top rate is currently 3.5 per cent from Skipton Building Society — much better than the poor rates of as little as 0.01 per cent currently offered on easy-access accounts.

Ms Coles says if you’re lucky enough to get a pay rise, you could consider saving that before you get a chance to spend it.

She says you should also check the small print of your savings account, adding: ‘If you miss payments in some instances, your interest rate plummets.’

Ms Springall, from Moneyfacts, suggests using the auto-savings app Chip. She says: ‘Chip works out how much money users could save and sends a text message as a notification before transferring the cash to a separate pot. 

‘Users can even see how long it would take them to save towards a certain goal, making it effortless to start building a savings fund.’

[email protected]

Read More at www.dailymail.co.uk

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

12 − 11 =

Back to top button