Centrica’s announcement that British Gas electricity prices would increase by 12.5 per cent for 3.1 million households from next month has sparked fury from opposition political leaders.
John McDonnell, Labour shadow chancellor, branded the price hike as “extortionate” while former Liberal Democrat leader Tim Farron accused the company of “treating people like cash cows”.
The Guardian advises consumers who are angry at the price hike to blame the government for failing to take action fast enough.
Centrica boss Iain Conn has shifted some of the blame in that direction too and said that government should be more open with consumers on the impact of policies to move to low-carbon energy on their energy bills.
The Department for Business, Energy and Industrial strategy responded by pointing out that wholesale prices for energy had come down, and indicated it had ‘not ruled out’ taking action to protect customers.
But for campaigners who have been pushing for a crack down on energy prices this isn’t good enough. The government has rowed back from a general election pledge to impose a cap on standard variable tariffs relative to the best offers of the energy companies. Against this backdrop, more radical proposals like the Labour party’s push towards gradual renationalisation of utilities may start to look more attractive. Meanwhile, consumers will have the option to vote with their feet by switching provider- in the past financial year, British Gas lost almost 400,000 customers- this number could rise significantly after the 12. 5 per cent price hike.
The Trump administration is considering its first major trade action against Beijing. Officials are engaged in “serious discussions” about launching a probe into a Chinese intellectual property regime that requires foreign companies to transfer technology to local subsidiaries and partners. The move would mark a shift in tone for the administration which has to date adopted a cautious line against China, despite President Trump’s public campaign against the country.
Prince Philip will complete his last public engagement today before he retires from royal duties. He will attend a parade of the Royal Marines who have taken part in a 1,664 mile trek in aid of charity.
Researchers at the Institute for Fiscal Studies have found that more than a million women in their early 60s have become poorer as a result of delays to their state pensions. According to the IFS study, on average women aged between 60 and 62 were now £32 a week worse off.
BUSINESS & ECONOMY
The executive chairman of the AA, Bob Mackenzie, was removed from his role yesterday by the board. No reason was given for his departure other than it involved “gross misconduct”. Mr Mackenzie’s son later said in a statement that his father had tendered his resignation due to acute ill health. This news as well as a downbeat trading statement contributed a drop in the company’s share price by 14 per cent to close at 210p.
Apple shares surged 6 per cent to a new record high yesterday on the back of a positive results announcement. iPhone and iPad product lines were strong and the company indicated it has hit a milestone of 1.2 billion iPhones sold. And consumers will not have to wait to much longer for the new iPhone, which is set to launch in September and is expected to come with better touchscreen technology and wireless charging.
CYBG, the parent company of Clydesdale Bank and Yorkshire Bank, indicated in a quarterly trading update it had seen “increased momentum” in its mortgage and small business lending business. Mortgages grew 5.8 per cent in the nine months to end June, and its core lending for smaller business grew 4.7 per cent. The group’s chief executive said the group’s cost -cutting programme was ahead of schedule.
What happened yesterday
A batch of earnings reports from blue chip companies contributed to the jump in the FTSE 100 by 51.66 points to 7,423.66.
Two of the highest gainers on the index were Rolls Royce, rising 91p to 979p, and Intertek, which rose to a record high of £46.95. The testing and inspection specialist rose 9.1 per cent on the back of half year results which showed improving revenue growth and margins.
Rolls Royce posted a first-half underlying profit rise of nearly 150 per cent.
Direct Line was higher after it posted a 9.5 per cent rise in first half operating profit.
Centrica’s stock rose as it announced British Gas would increase electricity prices by 12.5 per cent from mid-September, and said full-year adjusted earnings fell 11 per cent.
The pound rose against the dollar on the back of data for the UK manufacturing sector showing continued growth. Strong export performance, with the continued decline in the value of the pound relative the euro , has made UK producers increasingly competitive on the export market.
Aggreko, BAE Systems, Dignity, Devro, Eurocell, Johnston Press, Rio Tinto, RSA Insurance Group, Standard Chartered, Travis Perkins, William Hill
Bank Pekao SA GDS (Reg S), Smurfit Kappa Group
CML Microsystems, Schroder UK Growth Fund, Snoozebox Holdings
UK Economic Announcements
(00:00) BRC Shop Price Index
(09:30) PMI Construction
International Economic Announcements
(10:00) Producer Price Index (EU)
(12:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)
COLUMNS OF NOTE
As Jeremy Corbyn comes under pressure from the UK politicians to condemn Venezuela’s leaders, the FT discusses what action global leaders can take. International censure is the first, and overdue, step, it argues, and targeted, multilateral sanctions are the next.
Former Minister for Europe Denis Macshane advises Theresa May in The Times to study how the Swiss manage EU immigration. He makes the point that Switzerland has become Europe’s richest nation by giving preferential rights to native born workers while remaining open to foreign born employees. Switzerland has reached a compromise solution that would make sense for Britain, he suggests.
DID YOU KNOW?
The Duke of Edinburgh Prince Philip has completed 22,219 solo engagements since 1952.