There could be another interest rate hike to 5.5 percent this fall.
Although the CPI inflation fell from 7.9 per cent in June to 6.8 per cent in July, it remains well above the Bank of England’s 2 per cent target.
The bank’s Monetary Policy Committee, the body responsible for the decision, has already signaled its intention to announce another rate hike starting in October, with policymaker Katherine Mann telling the Canadian Association for Business Economics she is inclined to “err on the side of excessive tightening.” To avoid “embedding” inflation.
Such a move would represent another unwelcome development for many homeowners already struggling with mortgage payments, especially those with mortgages that have variable interest rates or follow the lead of the central bank, although Mann added: “If “I was wrong, and inflation slowed.” “More quickly and activity deteriorates further, I will not hesitate to lower interest rates.”
News earlier this summer that British wages had risen at a record rate and that food prices in supermarkets were starting to fall may have signaled that the cost of living crisis was finally on its way out.
However, the positivity is masked by the fact that core inflation – which removes volatile food and energy prices from the equation – remains unchanged at 6.9 percent, prompting some experts to warn that any gains will be eaten up by the rising cost of borrowing.
With this depressing backdrop in mind, here’s a look at the government financial support available to households in October.
Payments support
Although Rishi Sunak’s energy bill support scheme will end at the end of March this year (an initiative that distributed £400 in monthly installments of £66 and £67), millions of low-income households will receive more cost of living support from The government is worth up to £1,350 in total this calendar year.
Eight million eligible claimants for means-tested benefits, including people on Universal Credit, Pension Credit and tax credits, will soon receive the next batch of £300 cost-of-living payments as part of a program that began this spring, with the money going directly. Work and Pensions (DWP) are transferred to bank accounts in three tranches.
Total payments will generally be £900.
A separate payment of £150 has already been made to more than six million people with disabilities, and an additional £300 will be paid to more than eight million pensioners this winter.
You can access unlimited streaming of movies and TV shows with Amazon Prime Video
Sign up now for a free 30-day trial
You can access unlimited streaming of movies and TV shows with Amazon Prime Video
Sign up now for a free 30-day trial
here Payment windows What have been announced so far, with more precise dates expected later in the year:
The usual government support in the form of benefits and pension payments will also be disbursed as usual in October, with no public holidays due to disrupt delivery times.
Anyone expecting to receive any of the following from the DWP can expect to get their money on the usual date this month.
- Universal Credit
- State pension
- Trust retirement
- Disability living allowance
- Promote personal independence
- Attendance allowance
- Carer’s allowance
- Employment support allowance
- Income support
- Instead of searching for work
For more information about how and when to pay state benefits, please visit the website Government website.
Energy price caps drop again
The extreme heatwave we experienced in late summer in September may not have been comfortable for everyone, but it at least greatly reduced the need to turn on the central heating, which proved very costly over the course of last winter.
We can expect some of this warmth to continue into the fall, reducing demand for radiators, at least for now.
Meanwhile, the energy crisis that began pushing up electricity and gas prices a year ago has been largely brought under control, and the government’s Energy Price Guarantee (EPG) – introduced by short-lived Prime Minister Liz Truss in September 2022 – has been implemented to ensure people do not have to pay… Families no money. More than £2,500 on its own, with the government subsidizing the rest owed to providers under Ofgem’s energy prices cap (EPC) – was finally made irrelevant when the cap fell below £2,500 in July.
At that point, with a massive 17 per cent drop from £3,280 in Q2 to £2,074 for Q3 coming into effect, the average consumer was back to paying the cap rate as usual, leading to a similar rise in EPG to £3,000. A harmless technique for most people.
Ofgem has since announced that EPC will be set at £1,923 for the final quarter of the year (or £1,949 for those on prepaid plans).
The recent decline reflects recent declines in wholesale energy prices – the amount energy companies pay for electricity and gas before supplying them to households – and although this represents a significant decline from the dramatic rates of the past two years, the recent decline reflects a significant decline in wholesale energy prices. The figure is still around £1,000 a year higher than pre-pandemic levels.
As for what might happen next, analysts at Cornwall Insight say Almost no change Likely by the time the next EPC is announced for the quarter commencing 1 January 2024, at which point you would expect a typical annual bill to be £1,932.24.
The forecaster is currently forecasting slight declines in the second and third quarters of next year as well before a slight uptick in October 2024.
Despite this, the overall picture appears much more stable than it did one year ago, when the effects of the Russian war in Ukraine first appeared in global energy markets.