Rates and the Economy news in 2023
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- December 2023
Guidance amended to reflect energy price cap of £1,928 from 1 January 2024
The Accountant in Bankruptcy has amended its Common Financial Tool guidance to reflect the Ofgem energy price cap of £1,928 a year, which took effect for January to March 2024.
Resolution Foundation publishes October 2023 cost of living survey findings
The Resolution Foundation reports that most indicators of how families are faring remain far more concerning than two or more years ago, with 22 per cent of people in moderate or severe food insecurity in October 2023.
Mortgage arrears rise for fifth consecutive quarter in Q4 2023
UK Finance's Q4 2023 review shows mortgage arrears rose for a fifth consecutive quarter, with 107,250 mortgages in arrears of at least 2.5 per cent of balance in December 2023.
- November 2023
Ofgem to announce energy price cap for January to March 2024
Ofgem was due to set the energy price cap for January to March 2024 on 23 November 2023, with analysts forecasting a five per cent rise in the typical household bill.
Autumn Statement 2023 raises working-age benefits by 6.7% and state pension by 8.5% for 2024-25
Chancellor Jeremy Hunt has raised working-age benefits by 6.7% and the State Pension by 8.5% for 2024-25, while tightening sanctions for claimants who do not look for work.
Chancellor presents Autumn Statement 2023
Jeremy Hunt presented the Autumn Statement 2023 to the House of Commons on 22 November, cutting employee and self-employed National Insurance and abolishing the pensions lifetime allowance.
Autumn Statement extends mortgage guarantee scheme to June 2025 and cuts employee National Insurance by 2p
The Chancellor has extended the mortgage guarantee scheme to June 2025 and cut the main rate of employee National Insurance by 2p, alongside tax and spending measures worth around £17 billion a year.
Energy Price Cap to rise to £1,928 in January 2024
Ofgem's energy price cap will rise to £1,928 for a typical household in January 2024, up from £1,834, adding to winter bills for consumers across Great Britain.
- October 2023
Chancellor claims halving inflation means a 5p boost to real disposable incomes
Jeremy Hunt said on 2 October 2023 that halving inflation would be a 5p boost to real disposable incomes, a claim Full Fact said holds only against a counterfactual of unchanged inflation.
CPI inflation falls to 4.6 per cent in October
UK consumer price inflation fell to 4.6 per cent in October 2023, driven mainly by a reduction in the energy price cap, though core and services inflation stayed higher.
Ofgem introduces new lower TDCVs from October 2023
Ofgem cut the assumed typical household energy use it uses to express the price cap, lowering gas from 12,000 kWh to 11,500 kWh and electricity from 2,900 kWh to 2,700 kWh from October 2023.
- September 2023
Over half a million more pensioners could pay income tax after 8.5% state pension rise, experts warn
LCP estimates around 650,000 more people aged 65 and over would become income taxpayers if the state pension rises 8.5% in April 2024 while the personal allowance stays frozen at £12,570.
Record earnings figures revealed by ONS
ONS figures released on 12 September showed average wage growth of 8.5% including bonuses for May to July, the highest regular annual growth rate since comparable records began in 2001.
Extra 300,000 people projected to fall into absolute poverty in 2024-25
The Resolution Foundation projects an extra 300,000 people will fall into absolute poverty in 2024-25, with median non-pensioner household income flat for a third year.
Resolution Foundation projects three-year household income stagnation around 2024 election
The Resolution Foundation projects zero real growth in median non-pensioner household income in 2023-24, 2024-25 and 2025-26, a three-year stagnation after a sharp fall in 2022-23.
- August 2023
NIESR publishes report on impact of rising interest rates on housing costs
The National Institute of Economic and Social Research has published analysis of how fast-rising interest rates affect housing costs for mortgage holders and renters across the United Kingdom.
- July 2023
End of £400 universal winter Government energy support
The £400 universal Government energy support paid to households over the winter ended as the Ofgem price cap replaced the Energy Price Guarantee, cutting typical annual bills to £2,074 from July.
Energy price cap reductions began lowering domestic fuel budgets
Reductions in the energy price cap from July 2023 cut the domestic fuel element of the Pensions UK Retirement Living Standards budgets by more than a quarter for every household type, new research shows.
Energy Price Guarantee coverage narrowed to prepayment meter customers
Households without a prepayment meter lost Energy Price Guarantee support from July 2023, while prepayment customers remain covered so their costs align with Direct Debit customers.
Energy Price Guarantee made less generous, rising to £3,000 a year
The Energy Price Guarantee became less generous in July 2023, rising to £3,000 a year, but a fall in the price cap meant it no longer set maximum prices and bills fell.
Lower energy price cap commenced
The lower energy price cap that took effect in July 2023 pushed the headline rate of CPI down materially again, as UK Finance reported in its Q2 2023 household finance review.
Ofgem cuts typical domestic consumption values used in price caps
Ofgem has cut the typical domestic consumption values used to calculate the typical household bill in the energy price cap, reducing assumed gas use by 17 per cent and electricity use by 7 per cent.
Ofgem lowers energy price cap to £2,074 for England, Wales and Scotland
Ofgem has lowered its energy price cap for England, Wales and Scotland so that a typical household bill falls to £2,074 a year from July, £426 less than under the Energy Price Guarantee.
- June 2023
Bank of England raises base rate to 5.00%
The Bank of England raised the base rate by 0.50 percentage points to 5.00% on 22 June 2023, taking it from 4.50% and continuing a run of increases that affects mortgages, savings and borrowing costs.
Energy Price Guarantee extended to end of June 2023
The Energy Price Guarantee was extended to the end of June 2023, Consumer Scotland said in its response to an Ofgem call for input on the debt-related costs allowance in the energy price cap.
Market expectations for peak Bank Rate rise to nearly 6 per cent after stronger than expected inflation and pay data
Financial markets raised their expected peak for Bank Rate to nearly 6 per cent in mid-2024 after stronger than expected April inflation and pay data, the Resolution Foundation said.
ONS June 2023 data shows RHDI per capita fell 1.9 per cent in 2022-23, less than the 3.7 per cent fall forecast in March 2023
ONS outturn estimates from June 2023 show real household disposable income per person fell 1.9 per cent in 2022-23, less than the 3.7 per cent the fiscal watchdog had forecast in March 2023.
- April 2023
Benefits uprating and benefit cap rise in line with inflation
The UK Government uprated working age benefits and the benefit cap by 10.1 per cent from April 2023, a decision confirmed in the November 2022 Autumn Statement and applied to rates from 10 April 2023.
Dividend and capital gains tax allowance cuts take effect
The dividend and capital gains tax allowances announced in Jeremy Hunt's 2022 Autumn Budget took effect on 6 April 2023, halving the amounts that can be earned before tax is due.
ONS research shows majority of England private rents rose in the year to February 2023
ONS research reported by Which? shows 50.6% of privately rented properties in England had a rent increase in the year to February 2023, with London highest at 66.8%.
Minimum wage rise of almost 10 per cent takes effect
The minimum wage rose by almost 10 per cent on 1 April 2023, with 1.7 million workers gaining directly, according to the Resolution Foundation.
National Minimum Wage and National Living Wage rates rise on 1 April 2023
All National Minimum Wage rates rose on 1 April 2023, with the National Living Wage for workers aged 23 and over increasing 9.7 per cent to £10.42 an hour.
- March 2023
Energy Price Guarantee scaled back from April 2023
The Energy Price Guarantee is being scaled back from April 2023, capping typical household energy bills at £3,000 rather than £2,500, alongside a package of Cost of Living Payments.
Chancellor announces first Budget with Energy Price Guarantee extension and childcare reforms
Jeremy Hunt's first Budget extends the Energy Price Guarantee to the end of June, restructures Universal Credit childcare payments and scraps Work Capability Assessments.
Annual CPI inflation falls to 10.1 per cent
Annual CPI inflation fell to 10.1 per cent in March 2023 from 10.4 per cent in February, a seventh consecutive month of double-digit inflation, while food inflation reached a 45-year high.
Budget sets out OBR forecast of falling living standards
The Office for Budget Responsibility's Budget forecast shows living standards falling this year and next and not returning to pre-pandemic levels until the back end of the decade, with mortgagors facing the largest income falls.
UK food price inflation peaks at 19.2%
Scottish Government analysis puts annual food price inflation at 19.2 per cent in March 2023, the highest rate of increase in food prices since 1977, as overall UK inflation eased to 10.1 per cent.
Low Pay Commission opens consultation on 2024 minimum wage rates
The Low Pay Commission is consulting on minimum wage rates for April 2024 and beyond, running from 23 March to 9 June 2023, with recommendations to the Government due in October.
NIESR underlying inflation hits series high
The National Institute of Economic and Social Research said its trimmed-mean measure of underlying UK inflation rose to a series high of 9.9 per cent in March 2023, as food inflation reached a 45-year high.
- February 2023
Tenth JRF report finds 29.1% of UK individuals below MIS in 2020-21
The Joseph Rowntree Foundation's tenth Minimum Income Standard report estimates 19.2 million people, including 5.7 million children, lived in households below the benchmark in 2020-21.
Bank bosses questioned by Treasury Committee over passing on base rate rises
High street bank bosses were questioned by the Treasury Committee in February 2023 over why Bank of England base rate rises had not been passed on to savers.
- January 2023
ONS release published on how changes in housing costs are impacting households
The Office for National Statistics published an analysis on 9 January 2023 examining how rising mortgage rates and rents are affecting UK households, including those whose fixed deals are due for renewal.