Photograph: Universal News And Sport (Europe) Energy leaders have warned that household bills could rise by another 50% over the next six years. The claim from the industry’s trade body, Energy UK, came as EDF became the latest big six supplier to increase its current tariff by an average of 3.9% from January. And it came as senior executives from RWE and another major power company said they believed that security of supply was more important than affordability. Angela Knight, the chief executive of Energy UK, defended the sector and argued that the UK had the lowest gas price in the European Union and one of the lowest electricity costs. But she said the “old trilemma” of decarbonisation, energy security and affordability meant there was relentless upward pressure on prices. “The industry has become a lightning conductor for the general concern about the cost of living. As a result we stand accused for things that we do, for things that we don’t do, for things that we are responsible for and things that we are not this is not an understood industry.” Knight then referred to a report from investment bank UBS that said: “UK household energy bills have risen 70% since 2004; we expect them to rise another 46% in nominal terms by 2020.” Knight pointed out that UBS also blamed 95% of the future estimated tariff rises to government policies and power transmission network costs. The UBS report was also endorsed at the conference by Andrew Wright, the chief executive of energy regulator Ofgem, although he quibbled with some assumptions on the network costs. Meanwhile Guy Johnson, a director at RWE npower, said he believed that energy security was the most important element of the trilemma mentioned by Knight. His position, in response to a question at the same conference, was endorsed by Benj Sykes, the UK country manager of Dong Energy. EDF is now the fifth of the big six to raise prices, announcing average gas and electricity price rises of just under 4%.
Household saving threatened by increased appetite for credit, RBNZ says BusinessDesk 23 hours ago Print By Paul McBeth Nov. 13 (BusinessDesk) – Improvements in the country’s household savings rate in recent years as people got on top of stretched balance sheets during the longest recession in 20 years may be under threat amid increased appetite for credit, according to the Reserve Bank. New Zealand’s private savings have been increasing since 2010 as households cut back investment and put more money in banks’ term deposits, though rising demand for credit may test that, the Reserve Bank said in its six-monthly financial stability report. Deputy governor Grant Spencer said that improvement in private savings has helped reduce the nation’s external deficit, though new investment will likely stretch that trend, and stressed the importance of household savings and for the government to reduce its operating deficit. “Strong growth in retail deposits has allowed banks to reduce their reliance on offshore funding in recent years,” Spencer said in a statement. “Any sustained worsening of New Zealand’s external position will cause the banks to become more reliant on the international markets, thereby increasing their exposure to funding risk.” The country’s current account deficit, which is the shortfall between what it earns and borrows from other nations, is forecast to widen over the next three years, and any stronger local credit could leave New Zealand more exposed to overseas markets, the report said. The central bank said household debt has continued to grow faster than disposable income, with gains in net wealth stemming from the rapid appreciation in property values. That leaves households’ balance sheets at risk of getting stretched if house prices turnaround, or when interest rates start rising next year. (BusinessDesk)