Interest rates could rise further to 5.5% this fall.
Inflation, as measured by the Consumer Price Index, fell to 6.8% in July from 7.9% in June, but remains well above the Bank of England’s 2% target.
The central bank’s Monetary Policy Committee, the body responsible for this decision, has already indicated it intends to announce further rate hikes in October, with policy director Katherine Mann telling the Business Economics Association of Canada: “There is a tendency to make the mistake of tightening things up too much.” To avoid “embedding” of inflation.
These developments are a further unwelcome development for many homeowners who are already struggling to meet their mortgage payments, particularly those who have followed the central bank’s lead on tracker mortgages or standard variable rate mortgages. However, Mann added: “If I’m wrong and inflation slows” and the economy deteriorates even more rapidly, I won’t hesitate to cut rates. ”
Earlier this summer, news that British wages were rising at a record pace and supermarket food prices were starting to fall may have signaled that the cost of living crisis was finally coming to an end.
But that positive attitude masks the fact that core inflation, which excludes volatile food and energy prices from the equation, remains stubbornly unchanged at 6.9%, and some experts believe that any rise in has also warned that it will be eaten up by ever-rising borrowing costs.
With this frustrating background in mind, let’s take a look at the state financial support available to households this October.
Despite Rishi Sunak’s energy bill subsidy scheme – an initiative that handed out £400 in monthly installments of £66 and £67 – to expire at the end of March this year, millions of low-income households have received no government support. They will receive additional living expenses assistance. The government is worth up to £1,350 in total this calendar year.
Eight million eligible means-tested benefit claimants, including those in receipt of Universal Credit, Pension Credit and tax credits, will soon receive a £300 installment of their next living allowance as part of a program launched this spring. You will receive it and the money will be sent directly to you. The Department for Work and Pensions (DWP) has announced that the money will be transferred to bank accounts in three installments.
Total payments will total £900.
More than six million disabled people have already received an extra £150, and more than eight million pensioners will receive an extra £300 this winter.
The payment terms announced so far are: A more precise date will be announced later this year.
- £301 – First subsistence payment – issued between April 25th and May 17th (May 2nd to May 9th for people receiving tax credits but no other low income allowances) until the day)
- £150 – Disability Allowance – Issued between 20 June and 4 July 2023
- £300 – 2nd living expenses payment – in autumn 2023
- £300 – Payment to pensioners – During winter 2023/4
- £299 – 3rd living expenses payment – during spring 2024
Advantages of going out as usual
Normal state support in the form of benefits and pension payments will also be delivered as usual in October, as there are no bank holidays scheduled to disrupt delivery times.
Anyone expecting to receive any of the following from the DWP can receive their money on the usual dates this month.
- universal credit
- national pension
- Pension deduction
- Disabled living allowance
- personal independence allowance
- Nursing care allowance
- caregiver allowance
- Employment support allowance
- income support
- Job applicant allowance
For more information about when and how state benefits are paid, visit the government’s website.
Energy price ceiling falls again
The sweltering late-summer heatwave we saw in September may not have been pleasant for everyone, but the need to switch on central heating, which was so costly during last winter, has at least been significantly reduced.
As fall begins in earnest, some of that warmth is expected to stick around, further reducing demand for radiators, at least for the time being.
Meanwhile, the energy crisis that started sending electricity and gas prices soaring a year ago has largely been brought under control, with the government’s Energy Price Guarantee (EPG) in short-lived moderation to ensure households pay zero. Introduced by the Prime Minister in September 2022. His electricity bill was more than £2,500, with the government subsidizing the rest he owed to his provider under Ofgem’s Energy Price Cap (EPC), but when the cap fell below his £2,500 in July. , it finally became meaningless.
At this point, the average consumer is back to paying the cap rate as usual, with a significant 17% reduction from £3,280 in Q2 to £2,074 in Q3, with a corresponding EPG of £2,074. It was raised to the pound. 3,000 is a harmless technical term for most people.
Ofgem then announced that the EPC for the final quarter of this year would be set at £1,923 (or £1,949 for prepaid plans).
The recent drop reflects a recent decline in wholesale energy prices – the amount energy companies pay for electricity and gas before delivering it to homes. And while it is a significant drop from the eye-watering rates of the past two years, the figure is still almost £1,000 a year above pre-pandemic levels.
As for what happens next, Cornwall Insight analysts expect little to change by the time the next EPC is published for the quarter starting 1 January 2024, with the typical We expect our annual bill to be £1,932.24.
The forecaster now expects similar modest declines in the second and third quarters of next year, followed by a slight increase in October 2024.
Nevertheless, overall the situation looks much more stable than a year ago, when the rumblings of Russia’s war in Ukraine were first felt in global energy markets.
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