Energy prices are soaring – and it’s the Government’s fault.
That’s the message today from SSE which is hiking gas and electricity prices by 8.2pc from November 15. The Big Six energy company has blamed a 13pc increase in “Government-imposed levies on energy bills”, as well as smaller jumps in wholesale and network costs. In a radical proposal, the company has appealed to politicians to shift the green costs to the state which, it says, would take £4bn off UK energy bills and £8bn a year by 2020, cutting the average bill by £110.
The statement includes a defense of its 5pc target profit margin saying it’s “a fair amount”. Still, SSE knows what’s coming. “We know we will come in for a great deal of criticism for this decision and politicians will no doubt be lining up to condemn us,” Will Morris, boss of SSE’s retail division, has said. “But over many years policymakers themselves have failed to highlight adequately the cost to consumers the policies they have pursued in government.” SSE’s bombshell follows the warning from Ofgem’s boss of “rising black outs” in the run up to the election.
In company announcements today, WH Smiths has announced a 6pc rise in full-year pre-tax profits to £108m, beating analysts expectations. It’s Steve Clarke’s first set of results since he took over from Kate Swann on July 1 – but the numbers are characteristic of the old boss, with falling revenues but rising profits. Total sales and like-for-like sales are both down 5pc. The final dividend has been raised 15pc to 68.5p. And the group has announced another £50m share buyback, on top of the £50m buyback announced in August. BAE Systems has said that the on-going US government shutdown has not yet “been material to the group’s financial performance” but it has warned that there could be “some progressive impact” to its US operations if the stand-off continues. Some 1,200 BAE employees have been ordered not to work. Otherwise the defence giant says its outlook remains unchanged and it expects “double-digit growth in underlying earnings per share” for 2013, including its share buy back programme. Ashmore, the emerging markets fund manager, says it has continued to deliver net inflows during the last quarter despite the turbulence in its core markets. Britain’s biggest recruitment agency Hays has announced a 1pc rise in net fees over the past quarter with 8pc growth in the UK, suggesting the resurgent economy is having an impact on the job market. Meanwhile, Royal Mail shares are expected to be priced at 330p, the highest in the Government’s guidance range amid continued demand from retail and institutional investors.
At midday, the Bank of England will announced its latest interest rate decision. There shouldn’t be any surprises since Mark Carney said interest rates would be kept low until the jobless rate had fallen below 7pc. But the MPC’s (Monetary Policy Committee) views on quantitative easing will be carefully watched. Separately, Opec will publish its monthly oil report. In Washington, the shutdown continues but the countdown to default begin: the debt ceiling deadline of October 17 is now just a week away. Meanwhile, the G20 finance ministers and central bank governors meeting gets underway ahead of this weekend’s meetings of the IMF and World Bank. Eurozone leaders are also in DC to talk about progress on the debt crisis. Jeroen Dijsselbloem, chairman of the eurogroup, is speaking at the Bertelsmann Foundation along with Olli Rehn, Jorg Asmussen, Klaus Regling and Werner Hoyer.