Scottish Power and Eon have called for a special fund to be created that would allow customers’ bills to be frozen for two years and to spread the cost of the natural gas price crisis over ten years or more. According to Scottish Power boss, Keith Anderson, “unprecedented times call for unprecedented action”. UK families on default energy tariffs are staring at a surge in their annual bills from £1,971 to around £3,582 from 1 October when the new price cap set by Ofgem – and which is due to be announced on 26 August – is due to go into effect. The proposed ‘deficit fund’ would be backed by a government guarantee, allowing it to borrow billions from lenders such as Barclays, who had expressed interest in a prior similar proposal. – The Sunday Times
Economic data due over the coming week will help assess whether the Bank of England’s doom-mongering is justified. A widely held view is that the tax cuts that have been proposed by Liz Truss, alongside help for those struggling to meet energy bills, will allow the country to get through a downturn and avoid an extended recession. Indeed, most economists believe inflation will peak at a level closer to 12.0% this autumn, instead of the 13.3% envisaged by Bank, while the labour market has been resilient. Nonetheless, broker Investec still expects Bank to go ahead and raise official interest rates from 1.75% to 2.5% by year end. – The Financial Mail on Sunday
British Airways is to re-start ticket sales for short-haul flights from Heathrow on Monday, following a two-week halt brought on by caps on passenger numbers. Nonetheless, a spokesman cautioned that the situation was still “dynamic” so that ticket sales would be curbed where needed to meet the curbs in place at Heathrow. No timeline was provided for the possible lifting of the caps. – Sunday Telegraph
Many UK businesses are facing an energy ‘cliff edge’ come 1 October as suppliers are balking at renewing fixed-rate contracts as opposed to costly and hard to predict floating tariffs. Small and medium-sized companies are having trouble sourcing new fixed offers as credit insurers are unwilling to cover energy outfits’ business clients. Some businesses are also being asked to pay large upfront deposits. EdF and Eon had imposed temporary limits on new business customers and during the previous month Centrica had reportedly ditched some of its largest business clients. – The Sunday Times
Nuclear power is set to be rebranded as green energy in order to get investors behind projects such as Sizewell C, according to a source which had access to a draft report from the Treasury. That would lag a similar decision by some countries in the European Union in the wake of the surge in natural gas prices on the back of the invasion of Ukraine. A final decision is expected in early 2023. Among the potential investors is Phoenix Group, the owner of Standard Life. A spokesman for the Treasury highlighted that the government’s Energy Security Strategy had already made clear that nuclear would continue to be a key part of the UK’s low-carbon energy mix. – The Financial Mail on Sunday
