Energy prices to soar for millions of home owners, and more!

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Energy prices, negative interest rates, throw away beer, coronavirus hotspots quarantine.

Energy prices will rise for millions of people across the UK in April.

Regulator Ofgem stated the price cap for default domestic energy deals will rise to cover suppliers’ extra costs. The typical gas and electricity customer is likely to see their bill go up by £96 to £1,138 a year. Charities say the timing is a “double whammy”, coming at a time when the government’s Covid-related support schemes are due to be wound down. Ofgem said rising wholesale costs were behind the increase. Adding that the existence of the price cap meant households saved £100 a year. Also, they could also switch to a better deal

Negative interest rates

The Bank of England has told high street banks and building societies they have six months to prepare for negative interest rates. BoE policymakers stressed that the request did not mean a cut in borrowing costs below zero was imminent or even likely. However, with few tools left to boost the economy in the event of a downturn, the central bank needs negative rates to be available as an option.

How do negative interest rates work?

Banks get charged to park their money when rates are negative, Instead of earning interest on money left with the Bank of England.

The European Central Bank, the Swiss and Danish central banks and Bank of Japan charge local banks to deposit money. This is in the hope this will encourage them to stop hoarding funds, and instead lend more to each other, to consumers, and businesses. This in turn should boost the broader economy.

What would happen to my mortgage?

A fixed rate mortgage will see no immediate effect from an interest rate cut. Most households are on this type of deal. In recent years about nine out of ten new mortgages are on a fixed rate.

If it is a variable-rate mortgage, a tracker, or a mortgage on or linked to a lender’s standard variable rate – the rate could fall a little if the base rate is cut. However, the drop is likely to be limited by terms and conditions. Nationwide building society, for example, will never reduce the rate it tracks below 0% on mortgages arranged since 2009. Therefore, if your mortgage is at base rate plus 1 percentage point, it will never fall below 1%.

Pub closures could mean millions of pints thrown away

Up to 87 million pints of beer thrown away as a result of pub closures during Covid lockdowns around the UK, an industry body has calculated.

The British Beer and Pub Association (BBPA) called the waste – equivalent to £331m in sales – “heartbreaking”. Chief executive Emma McClarkin urged the government to give publicans more help in the Budget, including extending the VAT cut for the hospitality sector. The Treasury said keeping businesses going was its “priority”.

Barrelled beer not sold by its best-before date has to be sent back to breweries and disposed of. For pasteurised beers – including most lagers – this is usually about three to four months after delivery to pubs. For real ales and other unpasteurised beer, the timescale is normally around six to nine weeks.

87 million pints – or 49.5 million litres – would fill:

  • 20 Olympic swimming pools
  • 33 million standard-sized electric kettles
  • 495,000 baths (to the usual level required for a bather)

Quarantine from Covid-19 hotspots effecting UK residents

UK residents returning from coronavirus hotspots abroad will have to quarantine in hotels from 15 February. The government has confirmed.

Hotel owners will be asked to provide rooms for more than 1,000 new people every day, documents suggest. Passengers will have to stay in their rooms for 10 nights, with security guards accompanying if they go outside. Labour called the measures “too little, too late” to deal properly with new overseas strains of Covid. “It is beyond comprehension that these measures won’t even start until 15 February,” said shadow home secretary Nick Thomas-Symonds.

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