HUGE hikes in gas and electricity bills are coming this year, the energy privateers flagrantly announced yesterday.
‘Big Six’ energy bosses told MPs on the House of Commons Business and Enterprise Select Committee that families and old age pensioners can look forward to massive £400 energy price rises over the year.
Sam Laidlaw, the chief executive of privateer Centrica, which trades as British Gas, said it is ‘clear that gas prices are going to have to move up’ and agreed that predictions of 40% price rises were accurate.
Laidlaw said it was not fair to describe him and his ‘rivals’ as ‘fat cats’ and made the astonishing claim: ‘Our absolute price levels are currently the lowest in Europe.’
Rupert Steele of privateer Scottish Power said: ‘The whole industry figures will have to rise significantly,’ and agreed that households could pay £400 more a year on average for gas and electricity.
Although the government admits 2.5 million households are in fuel poverty, with more than 10% of household income spent on fuel bills, Energywatch says the figure is over 4 million.
Price announcements are most likely to come in August, when energy bills are not at the forefront of people’s minds.
Meanwhile, mortgage lending for house purchase by the main banks has fallen to its lowest level on record.
The British Bankers Association (BBA) said that the number of new mortgage approvals fell 20% to 28,000 in May, and are down a staggering 56% from last May.
The BBA said the number of new approvals was the lowest since its records started in 1997.
‘Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders,’ said David Dooks of the BBA.
Mortgage lenders, house builders, estate agents and surveyors are predicting that overall sales will fall by between 35% and 45% over the course of 2008.
The BBA data does not include building societies and figures from all lenders will be published by the Bank of England on June 30.
Howard Archer of Global Insight said: ‘The BBA data graphically highlight that housing market activity is currently being throttled by stretched affordability and tight lending conditions.’
l Unemployment is set to soar as 350,000 workers face the sack across Britain during the course of the next 12 months, according to a report published yesterday.
The Centre for Economic and Business Research said the City and the financial services sector will be hit by more than 100,000 of the predicted job cuts.
American banking giant Citigroup announced the axe for 10% of its investment banking division on Monday, equating to 6,500 employees, several hundred of them in London.