UK inflation unexpectedly stabilized at 6.7 per cent in September, still stubbornly above average Bank of EnglandInflation is targeting 2 percent, which keeps the cost of goods and services high and puts families under pressure.
The rise in oil prices during September hindered the hoped-for decline in price growth and raised the cost of a liter of gasoline at the pumps. At the same time, a weak labor market has increased unemployment. More positively, average wage growth rose at an annual rate of 7.8 percent between June and August, outpacing inflation for the first time in two years.
As the situation remains “difficult”, as Bank Governor Andrew Bailey said, Threadneedle Street has so far resisted the urge to raise interest rates to 5.5 per cent in response, preferring to keep them at 5.25 per cent. The bank’s Monetary Policy Committee is expected to do so again in November, and is unlikely to feel in a position to start cutting interest rates until next spring.
“We still have some work to do to get back to 2 per cent,” Hugh Bell, chief economist at the Bank of England, told OMFIF Research on October 15.
And we probably have some work to do to make sure that when we get back to 2 percent, we do so in a way that is sustainable over time.
Chancellor Jeremy Hunt also offered a gloomy assessment of the economy ahead of his autumn budget in light of the outbreak of a new international conflict, while Paul Johnson, director of the Institute for Fiscal Studies, warned that Britain remained in a “terrible financial bind”. It is headed toward a “moderate” recession in 2024 with no prospect of tax cuts or increased public spending on the near horizon.
All of this remains a depressing picture for consumers, even if inflation is now well below the 40-year high reached 12 months ago.
However, government financial support is still available to low-income families, and here is an overview:
Another support payment is imminent
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 people on low incomes will receive more cost support. Living 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 £300 tranche of a cost-of-living package as part of a program that began this spring, with the money going directly to the public, the Department said. 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.
here Payment windows Which have been announced so far, with more precise dates for final payments expected soon:
- £301 – the first cost of living payment – was already issued between 25 April and 17 May (or 2 to 9 May for people on tax credits but no other benefits for people on low incomes)
- £150 – Disability Payment – issued between 20 June and 4 July
- £300 – second cost of living payment – issued between 31 October and 19 November for most people
- £300 – pensioner pay – during winter 2023/4
- £299 – third cost of living payment – during spring 2024
Benefits of going out as usual
The usual government support in the form of benefits and pension payments will also be disbursed as usual in November, 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.
The energy price ceiling is expected to fall further
The relatively warm weather we’ve seen through much of October has delayed the moment when the central heating had to be switched on for the first time in months, a welcome development given that home heating bills were a concern for many over the course of last winter.
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 this 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 Another slight decline 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 £1,897.97.
The forecaster also expects slight declines in the second and third quarters of next year as well before a slight uptick arrives in October 2024.
Despite this, the overall picture appears to be more stable than it was one year ago, when the effects of the Russian war in Ukraine first appeared on global markets.
The warm house discount is back
Other good news on home energy bills as cold weather takes hold is the return of the Government’s Warm Home Rebate Scheme, which was first introduced in 2011 and offers a £150 reduction on domestic electricity and gas bills for eligible recipients.
A one-off discount is automatically applied to your bill Between early October 2023 and 31 March 2024, you are eligible for the scheme if you receive Guarantee the credit component of superannuation credit Or if you are on Low income It has high energy costs.
You can read more about Warm Home Discount eligibility here.