Closing summary
South East Water has said it needs a cash injection from investors to stay in business as it gears up for a major Ofwat ruling on its future spending plans.
The struggling water company – which serves 2.3 million people across Kent, Sussex, Surrey, Hampshire and Berkshire – said it is “in discussions with lenders and shareholders regarding additional liquidity”.
The talks are at an “advanced” stage and bosses “expect” to raise the extra funding, but the company has not struck a deal on the investment.
“If it is not possible to raise the additional liquidity, the group and therefore company would not have sufficient liquidity for the going concern period,” it said in a results statement on Wednesday.
It added that “the risk that the funding will not be received constitutes a material uncertainty that may cast significant doubt on the ability of the group and company to continue as a going concern”.
The UK’s new environment secretary, Steve Reed, has summoned the bosses of Britain’s water companies for urgent alks tomorrow, amid signs that Labour will take a tougher approach to the industry than the previous Tory government.
Reed will host talks with executives from all 16 water suppliers in England and Wales, including Thames Water, Yorkshire Water and Severn Trent.
The meeting comes as Ofwat, the water industry watchdog, is due to publish draft determinations on companies’ spending plans for the next five years tomorrow morning.
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Thank you for reading. We’ll be back tomorrow. Take care – JK
The Bank of England’s chief economist Huw Pill said that while UK services inflation remains strong, there are signs that “inflationary pressures have now been contained”.
In a speech at Asia House in London, he said:
At annual rates still not far from 6%, annual services price inflation and wage growth continue to point to an uncomfortable strength in those underlying inflation dynamics.
But the latest data also remains consistent with the view that these inflationary pressures have now been contained, and may be starting to revert towards levels that are more consistent with the achievement of the inflation target.
Markets are expecting the central bank to start cutting interest rates in August or September.
