Page 7 - Gi flipbook_May 2019

industry & government news

UK CONSUMERS HIT BY ENERGY

AND COUNCIL TAX BILL RISES

All the big energy firms have
increased their SVTs up to the maximum
the new cap allows. It means an average
three-bed household will pay £1,254 a
year to heat and light their home – up
from the old cap of £1,137. Contrary to
what some believe, it is the unit prices
that are capped, rather than the total bill.
The regulator Ofgem defended the
increases blaming higher wholesale
costs and other charges. But consumer
groups have questioned the move, not
least because the UK’s eighth biggest
CONSUMERS HAVE BEEN HIT BY PRICE RISES energy supplier, Bulb, lowered its
average prices to £1,000 days after
BRITISH CONSUMERS are facing a been raised to an average of £1,254. The Ofgem announced its cap increase.
multibillion-pound wave of price rises, move more than wipes out the promised There is also a rise of £106 a year to
including an increase in energy bills of savings when ministers launched the £1,242 for four million households on
£117 a year. government cap, on New Year’s Day. prepayment meters, who are typically
The costs amount to an extra £240 The price hike, which will cost more vulnerable customers.
on every household’s annual budget, householders £1.4 billion in total, affects The consumer group Which? said
according to the personal finance gas and electricity customers on their those who hoped the cap would bring
website money.co.uk, which puts the supplier’s most expensive standard an end to price hikes would be left
total cost of the increase at £4.5 billion. variable tariff (SVT) – the default deal “reeling” by these increases.
Energy rose by 10 per cent as energy that users are moved on to when they Despite much lobbying against its
regulator Ofgem’s new higher price cap come off a fixed-term tariff, or those introductions by the industry, the measure
comes into force. This will affect about who have never switched supplier. Many finally came into play on 1 January, but
11 million households. elderly users remain on these deals as came with the proviso that prices would
The controversial price ceiling has they are far less likely to switch supplier. be reviewed every six months.

HEDGE FUNDS TAKE OUT £86M BETS

AGAINST BRITISH GAS OWNER CENTRICA

HEDGE FUNDS ARE taking out record in 2012, reports City AM. Investors
bets against British Gas owner Centrica who short stocks borrow them from
as the energy sector faces challenges shareholders, only to sell them in the
from Ofgem’s price cap. hope that the company’s shares will
The cap has put pressure on lose value. If they do, the investor INVESTORS ARE BETTING ON A BLEAK
suppliers’ margins. buys back the shares cheaper than FUTURE FOR ENERGY GIANTS
Disclosed so-called short positions it sold them for, returns them to the
in the energy supplier have risen to shareholder – with a fee – and pockets around Christmas. Funds including
nearly £86 million from zero at the the difference. Marshall Wace have since sold their
beginning of February. Investors are obliged to declare positions, reducing the stake to below
The 1.31 per cent of shares being their short position in a company if it disclosure levels.
shorted are out on loan to US asset reaches above 0.5 per cent of shares. Centrica said in February it has lost
manager Blackrock and London It comes as the Centrica’s shares around 742,000 customers, or six per
hedge fund Marshall Wace, according have dropped 18 per cent since the cent, and would take a £300m hit in
to data from Castellain Capital. It funds disclosed their short positions. part from the cap. Shares hit a 20-year
represents the largest short position Meanwhile, short positions in fellow low after the news.
in the company since the current listed supplier SSE spiked at a record Centrica and SSE declined to comment
disclosure regime was introduced 1.39 per cent in February, from zero when approached by City AM.

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News.indd 2 16/04/2019 19:34