More than a third of English households will see higher energy bills this winter than they did last winter, according to research published by the Resolution Foundation.

Almost half of those hit by the higher bills will be in the poorest tenth of households, the report said.

Ofgem is expected to announce a reduction in the energy price cap from October, with typical annual energy bills falling from £2,100 last winter to around £1,923 this winter.

This fall is largely driven by falling wholesale gas prices.

Although the price per unit of energy is falling, this will be offset by a rise in the daily standing charge, and the fact that last winter’s universal £400 energy support is not being repeated.

As a result, the biggest falls in bills will be seen by households who use the most energy – while households who consume relatively little energy will face higher energy bills this winter.

Jonny Marshall, Senior Economist at the Resolution Foundation, said:

‘The cost-of-living squeeze is far from over. And, although government schemes have improved their targeting of support throughout the crisis to those most in need, significant gaps remain which should be urgently addressed to help the most vulnerable get through the challenging months ahead.

‘In the longer term, the government needs to reduce the UK’s dependency on gas and improve the state of our home insulation to prevent the winter energy crisis from becoming an annual occurrence.’

Internet link: Resolution Foundation website

The UK is set for five years of lost economic growth, according to research from think tank the National Institute for Economic and Social Research (NIESR).

The NIESR said the series of shocks from Brexit, Covid and Russia’s invasion of Ukraine had badly affected the economy. It added that the spending power of workers in many parts of the UK will remain below pre-pandemic levels until the end of 2024.

Despite pay increases, high inflation has forced up prices and the rising cost of living has left households throughout the UK feeling squeezed.

The NIESR forecasts that inflation, the rate at which prices rise, will remain continually above the Bank of England’s 2% target until early 2025, meaning the cost of living will also continue to rise.

Jagjit Chadha, Director at the NIESR, said:

‘The problem we face is that rarely has there been more urgent need, arguably never since the late 1970s, to address this country’s economic problems. But at the same time rarely have they been so entrenched that it is hard to think of any quick fixes that will materially improve living standards across the income distribution within a single Parliament.

‘The economy seems constrained by its pre-Covid peak in activity and is being held back by a sharp normalisation in policy rates, a sequence of persistent negative shocks to supply capacity and a marked slowing in world growth.

‘Brexit has done a great service by revealing even more clearly the underlying problems in the British economy but has not yet located solutions. In truth, shock therapy has tended not to work in any country and, so far, neither has Brexit.’

Internet link: NIESR website

The UK’s annual inflation rate fell to 6.8% in July, down from 7.9% in June, according to the latest data from the Office of National Statistics (ONS).

It is the smallest increase in the cost of living since February 2022.

A fall in gas and electricity, as well as a slowing down in the increase of food prices, are the major drivers behind the inflation rate decrease, according to the ONS.

However, core inflation, which strips out volatile items such as fuel and food remained unchanged at 6.9% in July while service sector inflation rose from 7.2% to 7.4%.

Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:

‘While a drop in inflation provides some comfort, the figures show less of a drop in inflation than hoped for and will renew fears of a wage-price spiral, and of yet more base rate hikes in future.

‘The worry now is that rising wages ignite a fresh wave of inflation in September, which will threaten the momentum from June’s GDP growth.

‘The cost of doing business crisis still has a grip on the small business community, as prices for many key inputs, from energy to components and raw materials, remain far above where they were a year ago.

‘Any reduction in inflation is good news, but the huge toll that spiralling prices have inflicted is still being keenly felt by small firms.’

Internet link: ONS website FSB website

A new fuel finder scheme to enable drivers access to live fuel prices and revitalise competition in the retail road fuel market, according to the Competition and Markets Authority (CMA).

The scheme would be made possible by new compulsory open data requirements and backed by a new ‘fuel monitor’ oversight body.

The proposals are the key recommendations by the CMA to the UK government following its report into the road fuel market.

The report found that between 2019 and 2022, average annual supermarket margins have increased by 6p per litre (PPL).

According to the CMA, greater transparency and shopping around as effectively as possible, the driver of a typical family car could save up to £4.50 a tank within a five-minute drive.

Sarah Cardell, Chief Executive of the CMA, said:

‘We need to reignite competition among fuel retailers and that means two things. It needs to be easier for drivers to compare up to date prices so retailers have to compete harder for their business.

‘This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.’

Internet link: GOV.UK

Almost a million young people have yet to access savings contained in Child Trust Funds (CTFs), according to a report by Parliament’s Public Accounts Committee (PAC).

The PAC said over £1.7 billion is waiting to be claimed by a million young adults, at an average value of £1,900 each.

It says ‘failure in long-term planning’ by HMRC means 42% of eligible 18-20-year-olds have not drawn on their savings.

The PAC says that given CTFs are not reaching many of the people they were designed to help, HMRC should be doing more to find and contact young people who have not claimed their savings.

According to the PAC, many young adults don’t know about their savings or have lost track of them. It found that CTF providers are charging fees for passively managing accounts but are not doing enough to link these accounts to their owners.

Dame Meg Hillier MP, Chair of the PAC, said:

‘The aims behind CTFs are laudable – for young people to come into a pot of money on reaching 18, with the promotion of financial literacy and good savings habits. But many young people are unaware that they have money waiting to be claimed.

‘In an ongoing cost of living crisis, our young people need every bit of support we can give them. HMRC still has time to make sure that CTFs are given the chance to be the boost to young people’s futures which they were designed to be.’

Internet link: Parliament website