Introduction: Average annual fuel bill to fall 12% to £1,690 under price cap, but â6m households trapped in fuel poverty
Good morning, and welcome to our rolling coverage of business, the financial markets and the economy.
The average annual dual fuel energy bill in in Great Britain will fall by 12% to £1,690 from 1 April, under a new price cap announced by the regulator Ofgem.
The price cap, which sets a maximum rate per unit that can be charged to customers for their energy use, will fall by 12.3% on the previous quarter from 1 April to 30 June. For an average household paying by direct debit for dual fuel, this equates to £1,690, a drop of £238 over the course of a year â saving around £20 a month.
Jonathan Brearley, Ofgemâs chief executive, said:
This is good news to see the price cap drop to its lowest level in more than two years â and to see energy bills for the average household drop by £690 since the peak of the crisis â but there are still big issues that we must tackle head-on to ensure we build a system thatâs more resilient for the long term and fairer to customers.
Thatâs why we are levelising standing charges to end the inequity of people with prepayment meters, many of whom are vulnerable and struggling, being charged more up-front for their energy than other customers.
We also need to address the risk posed by stubbornly high levels of debt in the system, so we must introduce a temporary payment to help prevent an unsustainable situation leading to higher bills in the future. Weâll be stepping back to look at issues surrounding debt and affordability across market for struggling consumers, which weâll be announcing soon.
Campaigners say this wonât stop 6m households from being trapped in fuel poverty. The charity National Energy Action says the typical bill is is still more than £400 a year more than it was in October 2021, the beginning of the energy crisis,, when 4.5 million households were in fuel poverty.
Adam Scorer, chief executive of the fuel poverty charity, said:
This is, of course, good news â any fall in energy bills is welcome. However, the drop coming in April still leaves bills significantly higher than they were before the energy crisis began. For two and a half years, household budgets have been stretched beyond breaking point by high energy bills.
Households in fuel poverty, on negative budgets and in impossible debt will see no chink of light this morning. The cost gap between where they are right now and escaping fuel poverty is getting wider. Whatever relief might be felt by this news, years of punishingly high energy bills will continue to take a heavy toll.
Stubbornly high prices are here for the foreseeable future â the government cannot simply ignore this as the new normal. We need a social tariff to provide permanent, deep protection for low-income households, we need action on debt to bring households out of this spiral, and we need long-term, significant investment in energy efficiency to make sure households are resilient against energy crises.
The Agenda
Key events
âWe wonât be remote-controlledâ: how German football fans took on investors and won
Toy cars mounted with flares and other stunts have disrupted Bundesliga matches. Now fansâ dogged defiance appears to have paid off, our Berlin correspondent Kate Connolly reports.
They have hurled tennis balls and chocolate coins on to the pitch; they have disrupted play with remote-control cars and planes mounted with smoke bombs. In recent months German football fans have thrown almost everything they have into protests aimed at preventing foreign investors from increasing control of their much-loved clubs.
This week it appeared their dogged defiance, driven by deep-seated grassroots sentiment, had paid off, after the German football league (DFL), which runs the Bundesliga, dropped its plans to sell an estimated â¬1bn (£850m) stake in its media rights income to a private equity firm.
The leagueâs board said it would no longer go ahead with the deal, in the hope, it said, of ending the unprecedented wave of protests, which have disrupted almost every game in the top two male divisions of German football since the start of 2024.
The stunts have led to lengthy delays, even match cancellations, which bosses said were a threat to the integrity of German football.
For fans, though, they were a winning gameplan that pulled off an unlikely victory. Comparing the struggle to that of David and Goliath, the fan group Unsere Kurve (Our Stands) celebrated the decision, and noted: âUltimately the key to this success were these comprehensive, and very peaceful and creative protests.â
UK watchdog orders Serco to stop using facial recognition, fingerprint scanning to monitor staff
The outsourcing company Serco has been ordered to stop using facial recognition technology (FRT) and fingerprint scanning to monitor staffâs attendance in its leisure business.
Britainâs data protection watchdog, the Information Commissionerâs Office, carried out an investigation that found Serco Leisure, Serco Jersey and seven associated community leisure trusts have been unlawfully processing the biometric data of more than 2,000 employees at 38 leisure facilities, for attendance checks and subsequent payment for their time.
Serco provides defence, security, immigration, health and transport services for the UK and other governments. Shares in the London-listed company fell 1.4% today.
The ICO said:
They failed to show why it is necessary or proportionate to use FRT and fingerprint scanning for this purpose, when there are less intrusive means available such as ID cards or fobs.
Employees have not been proactively offered an alternative to having their faces and fingers scanned to clock in and out of their place of work, and it has been presented as a requirement in order to get paid. Due to the imbalance of power between Serco Leisure and its employees, it is unlikely that they would feel able to say no to the collection and use of their biometric data for attendance checks.
Serco has also been ordered to destroy all biometric data that it is not legally obliged to retain. This must be done within three months.
John Edwards, UK Information Commissioner, said:
Biometric data is wholly unique to a person so the risks of harm in the event of inaccuracies or a security breach are much greater – you canât reset someoneâs face or fingerprint like you can reset a password.
Serco Leisure did not fully consider the risks before introducing biometric technology to monitor staff attendance, prioritising business interests over its employeesâ privacy. There is no clear way for staff to opt out of the system, increasing the power imbalance in the workplace and putting people in a position where they feel like they have to hand over their biometric data to work there.
This is neither fair nor proportionate under data protection law, and, as the UK regulator, we will closely scrutinise organisations and act decisively if we believe biometric data is being used unlawfully.
He said this action âserves to put industry on notice that biometric technologies cannot be deployed lightlyâ.
A spokesperson for the company told Reuters that the technology was introduced nearly five years following external legal advice and that it was âwell-receivedâ by staff, but added:
We take this matter seriously and confirm we will fully comply with the enforcement notice.
US man accused of making $1.8m from listening in on wifeâs remote work calls
US regulators have accused a man of making $1.8m (£1.4m) by trading on confidential information he overheard while his wife was on a remote call, in a case that could fuel arguments against working from home.
The Securities and Exchange Commission (SEC) said it charged Tyler Loudon with insider trading after he âtook advantage of his remote working conditionsâ and profited from private information related to the oil firm BPâs plans to buy an Ohio-based travel centre and truck-stop business last year.
The SEC claims that Loudon, who is based in Houston, Texas, listened in on several remote calls held by his wife, a BP merger and acquisitions manager who had been working on the planned deal in a home office 20ft (6 metres) away.
The regulator said Loudon went on a buying spree, purchasing more than 46,000 shares in the takeover target, TravelCentres, without his wifeâs knowledge, weeks before the deal was announced on 16 February 2023. TravelCentres of Americaâs stock soared by nearly 71% after the deal was announced. Loudon then sold off all of his shares, making a $1.8m profit.
Loudon eventually confessed to his wife, and claimed that he had bought the shares because he wanted to make enough money so that she did not have to work long hours anymore.
She reported his dealings to her bosses at BP, which later fired her despite having no evidence that she knowingly leaked information to her husband. She eventually moved out of the coupleâs home and filed for divorce.
Returning to the new energy price cap in Great Britain, Martin Lewis, founder of MoneySavingExpert.com, explains what the changes mean.
The cap dictates the price the huge majority of homes in England, Scotland and Wales pay for energy (so thatâs you unless youâre on a fixed or special tariff) as most firms just charge the max. It moves every three months, mostly based on average wholesale rates, yet thereâs a time lag â for example, this April to June Cap is based on November to February rates.
The new rates for 1 April have just been announced. In a nutshell, for every £100 a Direct Debit user spends on energy today, theyâll pay £87.70 for it from 1 April.
So itâs an improvement, and predictions are itâll drop again in July, though overall prices are still too expensive, nearly double the price of the cheapest pre-crisis fixes.
His main takeaways are:
1. Prepay will become the cheapest way to pay.
Prepay standing charges have been lowered to equalise them with direct debit, yet as prepay unit rates are cheaper, that means overall for a typical user from April, prepay will be about 3% cheaper. The most vulnerable households often use prepayment meters and it has always been a rip off, so this is a staggering turnaround.
Those on the price cap will see a saving by moving to a prepayment meter â yet that doesnât necessarily mean everyone should switch to one. If and when proper competition returns (see point 3) there are rarely any prepay deals â firms mostly focus on winning new Direct Debit customers, so it is likely Direct Debit deals will be cheapest for those who switch and prepayment will be cheapest for those that donât.
2. The energy bill poll tax will get worse. Standing charges for Direct Debit will rise to £334/year (from £303 now).
Even though overall bills will fall, standing charges wonât. Full details on unit rates and standing charges can be found here.
Standing charges are a form of poll tax as you pay it regardless of usage and a moral hazard as those on lower usage get less benefit and are disincentivised from cutting bills. Ofgem is currently reviewing standing charges and we will be pushing it to make changes for the July price cap.
3. Switching deals may be kicked into action for 1 April as Ofgemâs changing one of the two background rules that stop it (it should have changed both).
From 1 April, Ofgem is ending the âMarket Stabilisation Chargeâ (MSC) regime it set up during the energy crisis, which means if you switch firm to cut the cost, the new company must compensate your old company if itâs offering a cheap deal because wholesale rates are cheaper. This has effectively blocked most firms from offering cheap switchersâ deals, and why paltry saving âexisting customer onlyâ deals have been dominating. So I am delighted to hear it is going, and hope it will at last spur real competition to drive down prices.
Yet Ofgem has extended its other market restricting rule which bans âacquisition onlyâ tariffs for another year (though it may review that sooner). In other words, firms must offer existing customers the same deal as new customers (existing customers can still get different deals).
In normal times I could support this. Yet at the moment when most firms are simply sitting on their existing customers, letting them languish on the price cap I think we should be stimulating competition as much as possible.
4. The British Gas Price Promise deal doesnât look as good as it did.
Itâs currently 12% cheaper than the market but promises to be £1 less than the April price cap, and now that wonât be as big a change (Cornwall Insight had been predicting a 15% cut). In which case, if you want to fix to get price certainty, then there are cheaper deals.
To see a full list and analysis of whatâs available, see Lewisâs Should you fix my energy or stay on the Price Cap? guide.
5. You can undercut the price cap by 3%.
The Eon Next Pledge tariff, which you can switch to, charges roughly 3% less than the Price Cap for the first year. To get it, you need to be on direct debit and have or get a smart meter. So if that works for you, and youâre planning to stick on the price cap, itâs a no brainer.
Huge cybersecurity leak lifts lid on world of Chinaâs hackers for hire
A big leak of data from a Chinese cybersecurity firm has revealed state security agents paying tens of thousands of pounds to harvest data on targets, including foreign governments, while hackers hoover up huge amounts of information on any person or institution who might be of interest to their prospective clients.
The cache of more than 500 leaked files from the Chinese firm I-Soon was posted on the developer website Github and is thought by cybersecurity experts to be genuine. Some of the targets discussed include Nato and the UK Foreign Office.
The leak provides an unprecedented insight into the world of Chinaâs hackers for hire, which the head of the UKâs security services has called a âmassiveâ challenge for the country.
The files, which are a mixture of chat logs, company prospectuses and data samples, reveal the extent of Chinaâs intelligence gathering operations, while also highlighting the market pressures felt by the countryâs commercial hackers as they vie for business in a struggling economy.
I-Soon appears to have worked with â and later been embroiled in a commercial dispute with â another Chinese hacking outfit, Chengdu 404, whose hackers have been indicted by the US Department of Justice for cyber-attacks on companies in the US as well as pro-democracy activists in Hong Kong, among other targets.
Other targets discussed in the I-Soon leaks include the British thinktank Chatham House and the public health bureaux and foreign affairs ministries of Asean countries. Some of this data seems to have been gathered on spec, while in other cases there are specific contracts with a Chinese public security bureau to gather a certain type of data.
Apple has condemned Spotify over the long-running competition complaint filed with the EU that could see the tech company face a huge fine if found guilty.
After reports the bloc has concluded its investigation into the music streaming serviceâs claims of anti-competitive behaviour by Apple over its App Store rules, with the prospect of a â¬500m (£425m) fine, the iPhone manufacturer has accused Spotify of trying to get âlimitlessâ access to its tools without paying.
Stockholm-based Spotify filed a complaint with the EU in 2019, claiming that App Store rules limit choice and competition because Apple charges a 30% fee on purchases made through the store including music streaming subscriptions.
Reddit plans stock market debut
In other news:
Reddit set the stage for its highly anticipated stock market debut, preparing investors for the largest initial public offering by a major social network in four years.
A filing with the Securities and Exchange Commission on Thursday disclosed the financial performance of the social media group, and revealed that Sam Altman, the OpenAI founder and CEO, is its third-largest shareholder, with an 8.7% stake.
The company plans to trade on the New York Stock Exchange under the ticker symbol âRDDT.â Its much-awaited listing â expected in March â would be the biggest social media IPO since Pinterest went public in 2019.
The number of shares to be offered and the price range for the proposed offering have not yet been determined, Reddit said in a statement.
Business sentiment improves in Germany â Ifo
While the German economy remained stuck in the doldrums in the final months of last year, the outlook has brightened somewhat.
The Munich-based Ifo instituteâs closely-followed business climate index rose to 85.5 points in February, from 85.2 points in January as sentiment among services firms improved. Clemens Fuest, the instituteâs president, said:
This is due to slightly less pessimistic expectations. Assessments of the current situation remained unchanged â positive and negative responses here were nearly in balance. The German economy is stabilising at a low level.
In manufacturing, the business climate index fell, and perception of the current situation is at its lowest since September 2020. The decline in the order backlog continued, and companies announced further cuts to production.
However, in the service sector, the business climate improved. Service providers were more satisfied with their current business situation. Expectations were still pessimistic, but less so than they were in January. Orders remain weak, though.
In trade, the index dropped again. Companies were noticeably less satisfied with their current business situation, although their expectations improved slightly. They are still deeply skeptical of how business will develop in the months ahead.
In construction, the business climate indicator rose slightly, but remains at a low level. While the current situation has improved, expectations for the coming months fell to their lowest level since 1991.
How Ukraineâs largest private equity firm raised $350m during a war
Juliette Garside
How Ukraineâs largest private equity firm raised $350m during a war â by the Guardianâs deputy business editor Juliette Garside.
For Lenna Koszarny, the Canadian-born head of Ukraineâs largest private equity group, Horizon Capital, there was never any question of stopping work or leaving the country when Russia launched its February 2022 assault. But continuing to do business took resolve. âYouâre in the centre of a hurricane,â she said.
There have been 7,400 missile and 3,900 drone attacks on Ukraine since the war began, and working through them is part of daily life. âThe air raid sirens go off, you go into the bomb shelter, you take your computer ⦠and you keep working until the all-clear comes.â
There have been no casualties on her team. Itâs a different story for the 18 companies Horizon invests in â a third of employees have been killed. And yet Horizon, which manages $1.6bn (£1.26bn) in assets, has remained open throughout. âWe havenât shut the offices one day since the invasion.â
The companyâs 35 staff relocated to Lviv, near the border with Poland, for a few weeks at the start of the invasion, but Koszarny and her team soon returned to Kyiv and have remained in the capital throughout.
Horizon has managed to not only keep its doors open and its employees safe, but to raise $350m in a funding round that originally began in October 2021. After a delay caused by Russiaâs full-scale invasion, fundraising resumed, and the cap was raised from $200m to $300m, and then raised again, in a process that closed this month. It will be the first and largest private equity fund raised during the conflict.
Backers include the European Bank for Reconstruction and Development and the Rockefeller Foundation.
Amid the bombardment, talk of capital raising can feel out of place. But Ukraineâs ability to keep its economy afloat and continue exporting is crucial to the war effort.
Standard Chartered CEOâs pay jumps to £7.8m after profit bump
Rounding off the UK bank earnings season, Standard Chartered has handed its chief executive his largest pay package in nearly a decade as the lender reported a jump in profits, despite bracing for up to £1bn in potential losses due to Chinaâs property downturn.
The profit bump helped push the longstanding chief executive Bill Wintersâ pay up 22% to £7.8m â from £6.4m in 2022. It is the most he has been paid since 2015.
The London-headquartered bank, which makes most of its profits in Asia, Africa and the Middle East, said annual pre-tax profits rose by 19% in 2023, rising to $5.1bn (£4bn).
Standard Chartered shares are top of the FTSE 100 index, up 8.2%.
The growth was due in part to high interest rates, which allowed it to charge more for loans and mortgages. It said revenue from those interest charges, compared to what it paid out to savers, was expected to grow in 2024 âand beyondâ.
The stronger performance helped offset the money that the bank put aside for potential losses. The lender is ultimately expecting a loss of up to $1.2bn linked to its Chinese commercial real estate portfolio, though the actual charges taken for the year were offset by improvements in other parts of the business, and totalled $528m.
Standard Chartered also took a $153m hit in the value of its stake in China Bohai Bank, as Chinese lenders have become increasingly exposed to bad debts linked to its property crisis.
Wintersâ pay award outstrips every other year since he has led the bank apart from his first year, in 2015, when the 62-year-oldâs pay package was flattered by a buyout award and totalled £8.4m.
This week, rival HSBC nearly doubled the payout for its own chief executive, Noel Quinn, to £10.6m.
