UK energy price cap rises 10% today in blow to struggling households – business live | Business

Over in the US, dockworkers on the East Coast and Gulf Coast have begun a strike that will disrupt about half the country’s ocean shipping.

The port workers’ first large-scale stoppage in nearly 50 years began after negotiations for a new work contract broke down over the issue of wages.

The strike blocks everything from food to automobile shipments across dozens of ports from Maine to Texas, in a disruption analysts warned will cost the economy billions of dollars a day, threaten jobs, and stoke inflation.

Workers began picketing at the port of Philadelphia shortly after midnight, the Associated Press reported, walking in a circle at a rail crossing outside the port and chanting, “No work without a fair contract.”

The port of Virginia also confirmed the work stoppage.

More here.

Bakery chain Greggs has revealed that its costs are rising more slowly than it expected.

In a trading update today, Greggs says that it now expects the overall level of cost inflation for 2024 to be towards the lower end of the 4-5% range which it had previously expected.

Greggs adds that:

Whilst acknowledging ongoing economic uncertainty, the Board expects the full year outcome to be in line with its previous expectations.

Greggs has reported that total sales rose by 10.6% in the last quarter, to the end of September, a slowdown on the 12.7% sales growth during 2024 so far.

Greggs also reports that its autumn menu is now available, including an All-Day Breakfast Baguette and Mexican Bean & Spicy Cheese Flatbread.

It adds:

We’ve also introduced a Pumpkin Spice Doughnut to our sweet range, complementing the return of our seasonal drinks range including the Pumpkin Spice Latte and Salted Caramel Latte which are both also available as part of our over ice range.

There is some relief for households, though – shop prices are falling at the fastest rate in three years.

Despite an increase in food inflation, overall prices in the shops fell by 0.6% in the year to September, twice as fast as the 0.3% deflation recorded in August, according to the British Retail Consortium.

Non-food prices were 2.1% cheaper than a year ago, while food inflation rose to 2.3% in September, up from 2.0% in August.

Helen Dickinson OBE, chief executive of the BRC, says:

“September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation. Shop Price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months.

This was driven by non-food, with Furniture and Clothing showing the biggest drops in inflation as retailers tried to entice shoppers back. Food inflation edged up slightly as poor harvests in key producing regions led to higher prices for cooking oils and sugary products.

“Easing price inflation will certainly be welcomed by consumers, but ongoing geopolitical tensions, climate change, and government-imposed regulatory costs could all reverse this trend

Deflation means prices are lower than they were a year ago. But, of course, while the rate of price changes is negative, the level of prices is still much higher than before the surge of inflation began in 2021.

Today’s energy price cap rise comes as the company responsible for keeping Great Britain’s lights on has returned to public ownership for the first time in over thirty years as it prepares to make the electricity system 95% carbon-free by 2030.

Ownership of the electricity system operator has transferred from National Grid to the government to form a new National Energy System Operator (Neso) from today.

The new publicly owned organisation, which will be responsible for Great Britain’s electricity and gas systems, is expected to map a route towards the government’s green energy goals. The government hopes that by bringing together gas and electricity under one publicly owned company, the new system operator can adopt a more strategic approach to achieving a clean power system by 2030.

Neso’s chief executive, Fintan Slye, told the Observer that its roadmap would stop short of the Labour party’s pre-election pledge to create a “zero carbon electricity system” by 2030 in favour of a clean power target which is 95% free of carbon emissions.

He said:

“That means that by 2030 95% of the generation in Great Britain over the period of a year will be from clean power sources. And that means that the remaining 5% will come from unabated gas.”.

Slye said the “hugely ambitious” target to create a clean power system by 2030 would require Britain “to do everything that we can do quicker – but also very, very differently as well”. Its roadmap towards 2030 is expected to include advice on reforming the regulation around planning and consenting and speeding up the grid connections process.

Neso is also expected to work alongside GB Energy, a public company set up by the Labour government to invest in low-carbon energy, to help connect new generation projects with the electricity grid.

The decision to remove the ESO from National Grid’s ownership was made under the previous Conservative government because of concerns over a conflict of interest relating to the operator’s role providing strategic advice to government officials.

Here’s our profile of Slye, from last weekend’s Observer:

The boss of Ovo Energy has called for sweeping changes to the UK’s energy bills system so they are subsidised for poorer households, as consumers face another rise in fuel costs this winter.

Chief executive David Buttress told the PA news agency the Government should introduce a social tariff, something which is already used in the telecoms industry to help people who receive benefits like Universal Credit pay their broadband bills.

The measure, which campaign groups have proposed for several years, would likely take the form of a targeted discount energy deal for poorer customers, and could be below the price of the cheapest available standard energy tariff.

Buttress said:

“A social tariff would allow us to address the cost of energy for the poorest in our communities in a way that means, collectively, we could give them the protection they need to get through the winter months.”

The Resolution Foundation is warning today that 7.7 million households in England – including the majority of families with children – are at risk of “fuel stress” this winter.

Their analysis of government data found that 37% of all households faced “fuel stress”, defined as families needing to spend more than 10% of their income on heating their homes excluding housing costs.

It found that 77% of single-parent households are likely to experience “fuel stress” this winter, highlighting the impact of today’s increase in the energy price cap.

Alex Clegg, economist at the Resolution Foundation, says this shows how poorly targeted Winter Fuel Payments are, and why alternative support will be needed this winter.

Clegg adds:

“Couples with children are more than twice as likely to experience fuel stress as pensioner households, so any new support should not be limited to pensioners. Reforming and expanding Cold Weather Payments offers a viable quick-fix solution to help keep households warm when the mercury drops this winter.

“Looking beyond this winter, the Government should prioritise developing a social tariff and investing in energy efficiency for our homes. This would help to ensure that vulnerable families are insulated from future energy shocks, whatever their age or circumstances.”

More here:

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

It’s October, which means the nights are drawing in, the temperature is dropping, and arguments can begin about when to turn the heating on.

But flicking the boiler on has just become more expensive, adding to the burden on millions of households as winter approaches.

Average energy bills across Great Britain have just risen by £149 a year today, as the latest energy price cap kicks in.

The cap, set each quarter by regulator Ofgem based on the wholesale price of energy, has just risen by 10% to £1,717 a year for an average dual-fuel household in Great Britain paying by direct debit.

That’s an increase of almost £150 per year compared with the cap in April-June, based on the energy use for a typical household.

And while the cap is lower than the £2,500 at which the last government froze maximum bills at the height of the energy crisis, it’s still sharply higher than in autumn 2021, when average bills were capped at £1,277 a year.

The Joseph Rowntree Foundation is warning today that poorer families are already struggling to cope.

JRF research has found that, back in May, 2.9 million low-income households had been unable to keep their home warm in the previous six months, while 4.3 million had fallen behind with their household bills.

Katie Schmuecker, principal policy adviser at the Joseph Rowntree Foundation, says:

“Today’s energy price cap rise looms over families who are forced to heat their homes less than they should. It is more than three years since energy prices started to rise, creating an unacceptable level of prolonged hardship for millions of families who are still paying well above what they were before the cost-of-living crisis started. This looks like another winter of sleeping in a coat, not showering, and only cooking once a week, to try to keep the bills down.

“Families who already can’t pay their energy bills can no longer count on cost-of-living payments to provide any relief. We need to see an urgent plan for hardship at the upcoming Budget to stop those with the least going hungry and cold this winter.”

Yesterday, a seperate survey warned that almost half of British adults will ration their energy use this winter.

The agenda

• 9am BST: Eurozone manufacturing PMI report for September

• 9.30am BST: UK manufacturing PMI report for September

• 10am BST: Eurozone inflation report for September

• 2.45pm BST: US manufacturing PMI report for September