Closing summary
Time for a recap
Britain’s energy suppliers are expecting the government to U-turn on a planned cut to energy support for households – but have been told by officials in the meantime to prepare two sets of bills for next month.
The chancellor, Jeremy Hunt, is reportedly ‘poised’ to keep the energy price guarantee at its current level of support – which limits the typical annual household bill to £2,500 – beyond the end of March.
Hunt, who is due to announce the budget on 15 March, had planned to make the guarantee less generous from April, raising it to £3,000. One-off support of £400 that was available over the winter is also due to end on 1 April.
Campaigners have warned the price increase, if left unchecked, will plunge many thousands more families into poverty.
Energy suppliers have been contacted by government officials with two sets of rates for units of gas and electricity – depending on whether Hunt decides to extend the current level of support.
One energy chief executive said:
“We have effectively loaded two sets of rates into our systems to test the billing and make sure the direct debits are correctly calculated. We’ve been told everything is leaning toward [remaining at] £2,500.”
The government has not confirmed the U-turn but the Times reported on Friday that a Whitehall source said Hunt would cap bills at £2,500 for another three months, until July. The wholesale energy market is already betting prices will fall to more affordable levels over the summer.
Money Saving Expert Martin Lewis believes there’s an 85% chance that the government will bow to pressure and maintain its current support for energy bills beyond April, to July.
GOOD. All unofficial indications now show it looks like we've now won this campaign. Energy bills WON'T now rise 20% in April. I'm grateful to all charities who backed us in it.
— Martin Lewis (@MartinSLewis) March 3, 2023
And after asking, it's important also to say thanks to @Jeremy_Hunt & @grantshapps for listening. pic.twitter.com/nZvYcKSMtK
We are not at the smoking gun stage that this is definitely happening, but I would say we are at 85% likelihood that the price won’t be going up.
Oil prices have fallen after the Wall Street Journal reported that the UAE is having internal discussions about quitting the Opec producer group, due to a growing rift with Saudi Arabia.
The move that could potentially leave it free to lift output, but has been denied by sources.
On the economic front, the UK’s service sector returns to growth in February as business activity expanded at fastest pace since June 2022, a survey of purchasing managers has found.
America’s service sector also expanded last month, two surveys show.
But Ireland’s domestic economy fell into a technical recession at the end of last year.
And world food commodity prices have fallen for the 11th month running, UN data shows.
In other news…
A Guardian investigation has found anecdotal evidence of a surge in debt cases across the country, as the cost of living crisis stretches household budgets.
Women have been harder hit by the cost of living crisis because they tend to earn less, according to data from the Living Wage Foundation. It found that half a million more working women are paid below the real living wage than their male counterparts.
A decade of austerity by the Conservative-led governments after 2010 resulted in more than half a trillion pounds of lost public spending and a weaker economy, a left-of-centre thinktank has calculated.
In transport, the boss of HS2 has said that construction of the high-speed rail line could be further delayed in an effort to curb costs…
… while Luton airport’s long-anticipated light rail link finally opens to passengers next week – a swift connection that has, somewhat unfairly, been billed as the most expensive train in Britain.
Bakery chain Gail’s is the latest high-street chain hoping to serve its food through car windows, as it joins the move to drive-thru restaurants.
The Cambridge-based chip designer Arm is to pursue a US-only listing this year, dealing a major blow to Rishi Sunak’s ambitions to make London the first choice for tech company flotations.
And a Wassily Kandinsky masterpiece that had been stolen by the Nazis, who killed its owner in the Auschwitz concentration camp in 1944, has been sold for a record £37.2m at auction in London.
Updated
Two surveys of America’s services companies have confirmed that they kept growing last month, despite higher borrowing costs.
The Institute for Supply Management’s Services PMI came in at 55.1% for February, showing a very slightly slowdown from January when it was 55.2%.
The survey found that business activity, new orders and employment all rose last month.
Anthony Nieves, chair of the ISM’s services business survey committee, explains:
“Business Survey Committee respondents indicated that they are mostly positive about business conditions. Suppliers continue to improve their capacity and logistics, as evidenced by faster deliveries.
The employment picture has improved for some industries, despite the tight labor market. Several industries reported continued downsizing.”
The @SPGlobalPMI US Services PMI was 50.6 in Feb, up from 46.8 in Jan.
— MTS Insights (@MTSInsights) March 3, 2023
New order growth was still declining, but employment growth was the strongest since Sep 2022.
Selling price inflation was the fastest since Oct 2022.#services #pmi https://t.co/67KIlPww8Q pic.twitter.com/aNPxKRmFQM
The rival survey of purchasing managers from S&P Global also shows there was “a renewed expansion in business activity across the US service sector” in February.
Its Services PMI returned to positive territory last month, at 50.6, up notably from 46.8 in January (any reading over 50 shows growth).
Chris Williamson, chief business economist at S&P Global Market Intelligence, said:
“A return to growth of US service sector business activity in February for the first time in eight months has offset a decline in manufacturing output, helping stabilize the economy and hopefully avert a downturn in the first quarter.
The upturn was led by a revival in spending on services by consumers and improved activity in the tech sector, but was also aided by a marked cooling in the recent downturn in financial services.
