UK households hit by squeeze on living standards despite fastest growth in G7
Here’s our full story on the UK GDP data:
UK households faced a renewed cost of living squeeze in the first three months of 2025 amid increases in taxes and inflation, official figures show, despite the economy growing at the fastest rate in the G7.
The Office for National Statistics said an important measure of living standards – real household disposable income per head – fell by 1% in the first quarter after growth of 1.8% in the final three months of 2024, in the first quarterly decline for almost two years.
The households’ saving ratio – which estimates the percentage of disposable income Britons save rather than spend – slumped by 1.1 percentage points to 10.9%, although this remains historically high.
The signs of a fresh hit to living standards come despite the latest snapshot confirming that the UK economy grew by 0.7% in the first quarter, the fastest rate in the G7 group of rich nations.
Liz McKeown, the ONS director of economic statistics, said:
The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.
Ministers had welcomed the initial first-quarter growth estimate as evidence that Labour’s economic policies were starting to bear fruit after a rocky first few months in office. However, the more detailed snapshot highlights the squeeze on living standards, which risks undermining Keir Starmer’s promise for households to feel the benefits.
Key events
Nissan to cut jobs at Sunderland factory
Nissan Motor plans to cut jobs at its Sunderland factory, as part of a 15% reduction in its global workforce announced by chief executive Ivan Espinosa in May.
The Japanese carmaker said it wants to increase the efficiency of the Sunderland plant in northeastern England, where it employs 6,000 people, to make it a “leaner, more flexible” operation.
It did not say how many job cuts it is targeting. Japan’s Kyodo News, which earlier reported the planned cuts, said Nissan intends to lay off 250 workers.
Nissan said in a statement:
We will begin discussions with some of our employees at the Sunderland plant this week about voluntary retirement opportunities and support from the company.
As it slims down production, Nissan said in May it would make a further 11,000 job cuts, after 9,000 job losses announced in November, and close seven factories worldwide, although Sunderland is not expected to be among them.
The factory is seen as critical to Nissan‘s European operations and it plans to make the new version of its Leaf EV there.
Separately, Reuters reported today that Nissan has asked some suppliers in Britain and the European Union to delay payments to free up short-term funds, as it scrambles to boost cash.
Meanwhile, Sky is reporting that Ed Miliband, the energy security secretary is considering bringing oil refineries within a key state support scheme.
Exclusive: Ed Miliband, the energy security secretary, is exploring bringing oil refineries within the scope of a key state support scheme amid calls for the owner of the collapsed Prax Lindsey refinery in Lincolnshire to face an Insolvency Service probe. https://t.co/W1Ga9rWRYz
— Mark Kleinman (@MarkKleinmanSky) June 30, 2025
EU trade delegation heads to Washington for talks on tariff deal
Lisa O’Carroll
While the trade deal between the UK and the US, announced on 8 May, kicks in today, a trade delegation from the European Commisison will land in Washington DC later today to resume talks on a tariff deal.
With nine days to go before Donald Trump’s self imposed deadline, the question being asked across capitals and the US is whether the EU will follow the UK and settle on a thin deal dealing with the main sectors including cars and steel along with semiconductors and pharmaceuticals, sectors on which the US president is still threatening import duties.
Speculation is mounting as to what the EU would be prepared to compromise on to get a reduced or zero tariff across the line.
Could the EU follow Canada and abandon threatened taxes on digital services?
The government announced late Sunday that it would scrap its digital services tax on US technology companies in order to get trade talks re-opened.
A spokesman for the European Commission said on Monday that neither the Digital Services Act or the Digital Markets Act were on the table. But there was no mention of tax in a daily press conference in Brussels.
UK energy minister: ‘longstanding issues’ with Prax, workers ‘badly let down’
The UK energy minister, Michael Shanks, said there have been “longstanding issues” with this company, and “workers have been badly let down”. He demanded an immediate investigation into the conduct of the directors.
There have been longstanding issues with this company and workers have been badly let down.
The Secretary of State is today writing to the Insolvency Service to demand an immediate investigation into the conduct of the directors, and the circumstances surrounding this insolvency.
The government will ensure supplies are maintained, protect our energy security, and do everything we can to support workers and the local community, including engaging with trade unions and industry bodies.
The company has left the government with very little time to act. The government is supporting the Official Receiver to carry out their statutory duties, including managing the situation on the site to determine next steps. This will include urgently reporting back on all potential uses of the site, prior to a wind-down of the refinery.
The government believes that the business’s leadership have a responsibility to the workers and the local community. We call on them to do the right thing and support the workers through this difficult period.
As a reminder, Prax Lindsey Oil Refinery filed for insolvency on Sunday, and an official receiver has been appointed. The Official Receiver is an officer of the court who acts independently of the government, responsible for managing the winding up in the best interest of creditors. This includes protecting and collecting assets for creditors; finding out the reasons for the insolvency; and dealing with creditors’ claims.
Prax Group, led by chairman and chief executive Sanjeev Kumar Soosaipillai, purchased the Lindsey Oil Refinery from Total in 2021. Lindsey is the smallest refinery in the UK. It is located next to the Phillips66 Humber refinery, which is the dominant fuel supplier in Humberside and continues to operate at profit.
Financial reports indicate that Lindsey Oil Refinery recorded losses of around £75m between Prax acquiring it in 2021 and February 2024.
The company was unable to adequately answer repeated requests from the energy secretary to share information about its financial gap, and therefore unable to provide the government with the information needed to assess Lindsey’s financial viability.
Rob Davies
My colleague Rob Davies has more details:
One of the UK’s largest oil refineries – and the only big one owned by a British company – has collapsed into administration, prompting calls for the government to intervene urgently to protect fuel supplies and jobs.
State Oil, which owns the Prax Lindsey refinery in north Lincolnshire, called in administrators on Monday, Sky News reported first, prompting concern from the trade union, Unite.
The failure is likely to cause a headache for government officials, given that the company’s 5.4m tonne-a-year capacity represents nearly a tenth of the national total. About 180 people work at State Oil, and 440 more are employed at the Prax Lindsey refinery, according to Sky.
State Oil is part of the Prax Group, which is majority owned by the seldom-seen husband and wife team Winston and Arani Soosaipillai, who bought the company from the French oil group Total in 2021. A further 20% is held by family trusts connected to them.
Prax Lindsey is the only one of the UK’s five leading oil refineries to have a UK owner; the remainder have US and Indian parent companies.
The group also has oilfield investments in Shetland and owns roughly 200 petrol stations in the UK under the Breeze and Harvest Energy brands, but these are outside the insolvency process.
Photograph: Stephen Parrott/Alamy
Ewan Gibbs, historian of energy, said on X:
This is a major crisis in the British oil and gas sector. Since 2020, Prax have bought Lindsey oil refinery, oilfields to the West of Shetland and the gas plant at the Sullom Voe terminal on Shetland. These are important operations extending from drilling to refining products. https://t.co/UaFFYjiySL
— Ewan Gibbs (@ewangibbs) June 30, 2025
It is one of only six major oil refineries in the UK.
Prax owns the Lancaster oilfield in the British North Sea, a geologically complex project that has been stuck in an early production phase for years. it also runs more than 200 fuel service stations across the country.
At Prax Lindsey Oil Refinery, we’re proud to be one of only six major refineries in the UK – a highly complex, world-class supplier of fuels powering the nation. We manage the Finaline pipeline, moving fuel to Heathrow via HOSL and the West London system. #ILoveLindsey pic.twitter.com/NgorpwsKLP
— Prax (@PraxGroup) May 28, 2025
Official Receiver appointed as liquidator to Lindsey oil refinery
The Insolvency Service has reported that the Official Receiver, Gareth Jonathan Allen, has been appointed as the liquidator of the Lindsey oil refinery.
They say:
On 30 June 2025, a winding-up order was made against Prax Lindsey Oil Refinery Limited, Prax Storage Lindsey Limited, and Prax Terminals Killingholme Limited. The court appointed the Official Receiver, Gareth Jonathan Allen, as Liquidator.
The Official Receiver will wind-up the companies in accordance with his statutory duties, and will investigate the cause of the companies’ failure and the conduct of current and former directors, they add.
Creditors who are owed money by Prax, or who have paid for goods and services, can register as a creditor in the liquidation.
Lindsey oil refinery owner calls in administrators; government urged to act
Graeme Wearden
Newsflash: The British high court has appointed Teneo as the administrator of the owners of the Lindsey oil refinery in Lincolnshire, Reuters reports.
State Oil Limited and Prax Treasury Limited own the Lindsey refinery, which is located on a 500-acre site five miles from the Humber Estuary.
Joint administrator Clare Boardman says:
“We will be considering all options for the Group, including the prospect of a sale for the Group’s upstream business and retail operations in the UK and Europe, all of which remain outside of insolvency.”
Sky News is reporting that that State Oil was forced to call in administrators amid mounting losses at the refinery.
Unite general secretary Sharon Graham is urging ministers to take action to save jobs:
“The Lindsey oil refinery is strategically important, and the government must intervene immediately to protect workers and fuel supplies.
“Unite has constantly warned the government that its policies have placed the oil and industry on a cliff edge. It has failed to act and instead put its fingers in its ears.
“The government needs a short-term strategy to keep Lindsey operating and a sustainable long-term plan to fully protect all oil and gas workers.”
UK households hit by squeeze on living standards despite fastest growth in G7
Here’s our full story on the UK GDP data:
UK households faced a renewed cost of living squeeze in the first three months of 2025 amid increases in taxes and inflation, official figures show, despite the economy growing at the fastest rate in the G7.
The Office for National Statistics said an important measure of living standards – real household disposable income per head – fell by 1% in the first quarter after growth of 1.8% in the final three months of 2024, in the first quarterly decline for almost two years.
The households’ saving ratio – which estimates the percentage of disposable income Britons save rather than spend – slumped by 1.1 percentage points to 10.9%, although this remains historically high.
The signs of a fresh hit to living standards come despite the latest snapshot confirming that the UK economy grew by 0.7% in the first quarter, the fastest rate in the G7 group of rich nations.
Liz McKeown, the ONS director of economic statistics, said:
The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.
Ministers had welcomed the initial first-quarter growth estimate as evidence that Labour’s economic policies were starting to bear fruit after a rocky first few months in office. However, the more detailed snapshot highlights the squeeze on living standards, which risks undermining Keir Starmer’s promise for households to feel the benefits.
Simon Gammon, managing partner at Knight Frank Finance, said that while mortgage approvals ticked up, they are “broadly consistent with a property market treading water”. He explained:
Mortgage rates have largely plateaued, with leading fixed deals just below 4%. Lenders are adjusting pricing at the margins – some cuts, the occasional rise – but it’s more about managing business volumes than responding to any major shift in outlook.
Remortgaging jumped and will continue to rise as the year progresses – 1.8 million fixed rate mortgages are due to mature during 2025. This will be painful for those moving off five-year fixed rate products agreed in 2020, when mortgage rates were still ultra-low.
The housing market remains driven by first-time buyers and families who really need to move, rather than discretionary buyers in higher price brackets. Downsizers are active too, though many are struggling to offload larger homes in favour of smaller ones, where activity is stronger.
The outlook for mortgage rates is benign, and recent labour market data points to a weakening economy that could unlock further base rate cuts – perhaps to 3.75% by the year end. Still, with leading fixed rates unlikely to dip below 3.7% before 2026, current sluggish conditions look set to persist.
