Energy Price Cap

Well, we were expecting bad news, but it really is.

Maybe we should resurrect:

Distracted by other matters last year I missed the chance to fix my rates, but I’m now finding most providers’ websites completely opaque with regard to actual costs per kWh. I really think they should be compelled to display per kWh tariffs simply without scouring the site or requesting quotes.

In some ways it will make most people reconsider their energy usage they’d formerly taken for granted as affordable which is good (provided you can cut out non-essential expenditure), but it’s going to hit far too many millions of the poorest in the UK in a devastating manner, especially those on lowest incomes and the elderly living alone.

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As in the previous thread, no political comments please.

The prices are what they are and will affect individuals/families as well as businesses with knock-on effects on food.

I cannot recall in my lifetime similar price hikes for any commodity which have the potential to put so many into real poverty, and even worse for those already in poverty.

Have we just had it too good for too long?

Maybe we need to concentrate on heating individual rooms rather than the whole house as in my grandparents’ time.

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We fixed our tariff with Octopus in June 2021, so prices are fixed until June 2023. It now seems we will get £200 off in the year from October, to be repaid over four years at £50 per year. Clearly the £200 discount has to be simple to apply, but it does seem odd that we will get it. I’d rather not have it at all, as it seems an unnecessary complication in our case.

We are quite frugal in our energy use, with the thermostat set at 19.5 in the morning eland evening, and our combined bill is £110 per month. My neighbour came over earlier and was telling me that his is only £80 a month. His is set at 19 and he doesn’t heat upstairs, and is very frugal. Both he and his wife, and is, have blankets for when it gets chilly.

Contrast that with next door, whose house is like the tropics and you are almost floored by the warm blast when the door opens. They have small children, but even when ours were small we were careful with energy use.

Obviously it’s a nightmare for those on the edge, but for others a little more frugality would not go amiss, and it would do the planet a lot of good. Nobody needs to swan around the house in a T shirt in the depths of winter.

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UK gas prices spiked in September at approx. 8 x trading value of previous year. They are now at less than half those September prices. The unknown of course is what they do next.

Lots of reasons for this of course, many of them pandemic driven.

However the reactions to this and other inflationary measurements just now are bordering on hysteria. Yes it’s expensive just now, yes people will be worse off for a while, however after close on zero inflation for a decade it’s hardly a surprise that the averages are working their way out now.

And as for ‘another rise in the base rate adding to people’s woes’, 0.5% ?!?! I mean come on….

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The trouble here is that you, like me, can probably find another £100 a week with little if any difficulty. Many, of course, cannot. We cannot get into politics, but when you have a rich country with people making heat or eat decisions, something is clearly not right.

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I thought they had too, then saw this on the beeb yesterday:

From:

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Well done on getting that fixed rate, I didn’t have my ‘eye on the ball’ for other reasons.

I agree that £200 off is odd and it ought to be optional for each customer.

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Universal credit is £120/week approx. Imagine an additional £10-15 of that going on fuel costs.

This is going to hurt a lot of people really badly. It is not hysteria in my view

Bruce

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Technically when mortgage rates have been low for ages I agree, but it will be an unwelcome hike for many especially at the time increased NI contributions kick in.

No easy answer for anyone of any political persuasion.

I’ve just had an embarrassing conversation with the guy at the local wine shop.

I said ‘many would consider it ridiculous I’ve just spent nearly £70 on 3 bottles of wine, I’m considering heating only one downstairs room’, the reply was ‘I’m in a one room flat and the fan heater works fine’.

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It’s going to be nothing other than a kick in the teeth for millions.

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The huge question is whether or not these price hikes are anomalous due to unforseen circumstances and temporary, let’s hope so, but I doubt it.

…and even worse that this comes at a time when so many have been reliant on foodbanks for years. It’s rotten.

Your judgement regarding hysteria is indefensible. Imagine if you were a pensioner reliant solely on the state pension or a single parent bringing up a family on an ‘average’ income. Unfortunately most UK residents are not fortunate (or is it foolish?) enough to be Naim owners.

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We’d never spend that much on wine! One of the outcomes of low base rates has been that people have massive mortgages, because they are more affordable. So a 0.25% increase equates to quite a lot per month. Back in day we paid over 15%, but the mortgage was much smaller relative to income. Now banks are offering 7 times salary or some crazy multiplier.

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It’s probably quite conservative compared to some items on the ‘What are you imbibing?’ thread.

Only a few years ago I’d never have spent more than £8-10 a bottle, but those due to local devolved taxes are pretty poor these days.

Probably the worst possible thing that ever happened locally was a specialist wine shop opening a few streets away. :neutral_face:

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It will bite, many people will definitely be worse off by varying degrees in the coming months, however the coverage in the media absolutely strikes me as close on hysteric. As usual it concentrates on the now, not the bigger picture inclusive of what was and what will be.

Prices are supposed to go up, that’s how economics works. However, prices have in effect been falling on most goods and services in the UK for over ten years. That cannot go on forever. The maths doesn’t work.

Broad inflation is high today for a number of reasons, however a key one is simply one of timing. In the middle of a global pandemic, many things were a lot cheaper than they should normally be, hence when prices were then measured to the previous 12 monthly point, there is no inflation. We’re now measuring back 12 months to the middle of the pandemic, prices are absolutely going to be higher for many goods and services right now than they were 12 months ago. That’s just plain logic. And once again, maths.

Personally, I believe inflation at this level will be relatively short lived. I could be very wrong of course. However, I go by what I see. Supply chain bottlenecks caused by the knock on effects of the pandemic around the world defo pushed prices up in the back half of last year. I could see this at ground level in the weekly supermarket shop. For just about ten years before then, the weekly bill has barely changed, I supect many of you have seen the same.

I reckon this went up by a good 20% for a few weeks and months. Then 2 weeks ago, all of a sudden, there are barely any missing items on the shelves, bogofs and discounts are back and low and behold the last couple of weeks, the shopping bills are now back close to what they were 6 months ago.

Factories and supply chains are getting back to normal around much of the world. People can no longer rely on direct financial support offered by their Government during the pandemic. They will return to the workplace. Offical inflation will remain a bit higher through the next 12 months while some things work their way through the system, e.g. the price of gas, oil and holidays but the signs of a pushback are there imo.

I also had a look at current gas prices vs. futures and compared the market on energy bills. Interesting that right now the variable rates are much lower than the fixed rates. Seems like a number of providers bought at the peak…

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I don’t often spend generously on wines etc , but I became an OAP this week , and a chunk of money will be now going on fuel.

My company pension has a max increase of 3% …

This could erode a lot of living standards very quickly , let us hope it is a temporary blip

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Listening to Radio 4 a little earlier today about the price rise, the interviewee suggested that the prices will not return to previous levels for the foreseeable future.

Fuel prices have risen here in Norway too. But the energy of choice is electricity, gas is not used in the home. The electricity comes predominately from Hydro, but the price hike is nothing like in the UK.

I am staggered!

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No, it isn’t. It is absolutely going to be very tough for many people. However, in the not too distant future I strongly suspect this will be a remember when… story. I could be very wrong but when I look at the facts, not the headlines, I see a different picture to the soundbites and voxpops being aired morning, noon and night just now.

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I’ll bite back Jamie - I largely agree with your analysis which is likely more professional than my musings.

However you and I have no idea how these affect the poorest in society where sometimes pennies rather than pounds may make a difference over time.

Best wishes

AC

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