Morning Briefing: Gov’t Borrowing Falls; Energy Bill Reprieve Likely

Borrowing
in
the
financial
year
to
December
was
£119.1
billion,
which
was
the
fourth-highest
for
the
period
on
record.
It
was
10%
higher
than
the
equivalent
nine-month
period
of
the
prior
fiscal
year.

Public
sector
net
debt
excluding
public
sector
banks
was
£2.686
trillion,
which
is
provisionally
estimated
to
be
around
97.7%
of
the
UK’s
annual
gross
domestic
product.

“This
is
1.9
percentage
points
higher
than
in
December
2022
and
remains
at
levels
last
seen
in
the
early
1960s,”
the
ONS
noted.

Will
UK
Energy
Bills
Fall?

Elsewhere,
UK
energy
bills
are
set
to
fall
by
the
equivalent
of
more
than
£300
a
year
from
April
following
a
drop
in
wholesale
gas
prices,
analysts
have
predicted.

Cornwall
Insight
has
forecast
average
bills
will
fall
by
16%
on
the
previous
quarter,
and
could
reach
their
lowest
since
Russia’s
invasion
of
Ukraine
in
February
2022.

The
forecaster
predicts
Ofgem’s
price
cap,
representing
the
average
annual
bill
for
a
typical
household
in
Great
Britain,
will
fall
from
the
current
£1,928
to
£1,620
from
April
–
£40
lower
than
it
predicted
in
December.

Furthermore,
it
has
predicted
prices
will
remain
lower
than
the
current
cap
throughout
2024,
falling
to
£1,497
a
year
in
July
before
rising
slightly
to
£1,541
in
October.

It
said
tensions
in
the
Red
Sea
had
failed
to
derail
the
prospect
of
lower
energy
bills
and
European
gas
stocks
remained
at
higher-than-expected
levels
for
the
time
of
year,
reflecting
the
relatively
mild
winter.

This,
combined
with
“fairly
healthy
supply
conditions”,
had
seen
wholesale
prices
fall
since
November.

However
it
warned
that
despite
the
recent
wholesale
price
drop,
UK
energy
prices
remained
vulnerable
to
global
events,
and
any
potential
disruption
to
supplies
would
“weigh
on
market
confidence,
and
we
will
need
to
keep
a
close
eye
on
market
fluctuations
over
the
next
few
months”.

Additionally,
ongoing
consultations
by
Ofgem
on
potential
changes
to
the
price
cap,
including
the
standing
charge
and
bad
debt
collection,
could
affect
the
overall
figure.

What
is
a
Social
Tariff?

Craig
Lowrey,
principal
consultant
at
Cornwall
Insight,
said:
“concerns
that
events
in
the
Red
Sea
would
lead
to
a
spike
in
energy
bills
have
so
far
proved
premature,
and
households
can
breathe
a
sigh
of
relief
that
prices
are
still
forecast
to
fall.

“Healthy
energy
stocks
and
a
positive
supply
outlook
are
keeping
the
wholesale
market
stable.
If
this
continues,
we
could
see
energy
costs
hitting
their
lowest
since
the
Russian
invasion
of
Ukraine.

“Though
recent
trends
hint
at
possible
stabilisation,
a
full
return
to
pre-crisis
energy
bills
isn’t
on
the
horizon.
Shifts
in
where
and
how
Europe
sources
its
gas
and
power,
alongside
continued
market
jitters
over
geopolitical
events,
mean
we
are
likely
still
facing
costs
hundreds
of
pounds
above
historical
averages
for
a
while,
potentially
the
new
normal
for
household
energy
budgets.

“Whether
we
can
achieve
long-term
reductions
in
the
UK’s
energy
costs
will
hinge
on
breaking
free
from
the
volatility
of
imported
energy
prices.
To
make
a
real
and
lasting
impact,
we
need
to
commit
to
a
sustained
transition
to
homegrown
renewable
energy
sources,
reducing
our
reliance
on
the
volatile
international
energy
market.”

Which?
Energy
editor
Emily
Seymour
said:
“Millions
of
households
across
the
country
will
be
relieved
to
hear
energy
bills
are
still
predicted
to
fall
in
April.

“If
you’re
on
a
variable
tariff,
then
any
reductions
to
the
price
cap
will
be
automatically
applied
in
April.
If
you
are
on
a
fixed
deal
and
think
you
might
be
paying
more
than
the
new
rates
come
the
spring,
then
it’s
worth
checking
the
exit
fees
to
see
if
you
can
leave
early
if
prices
do
fall
below
the
cost
of
your
fixed
tariff.

“In
the
long
term,
a
properly-targeted
social
tariff
is
desperately
needed
to
ensure
the
most
financially
vulnerable
are
able
to
afford
their
energy
bills.”

By
Elizabeth
Winter,
Alliance
News
deputy
news
editor,
and
Josie
Clarke,
PA
Consumer
Affairs
Correspondent

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