Newsletter 10th October 2022

How to Save Money on Energy

Energy prices increased by ￡500 at the beginning of October for homes in England, Wales, and Scotland using an average amount of gas and electricity.

Energy-saving initiatives will not compensate for the substantial increase in prices. However, a series of simple tweaks might save hundreds of pounds every year.

Here are Six tips to get you started.

Kwasi Kwarteng's Champagne Reception: Ministerial Code Breached?

There are requests for Kwasi Kwarteng to commission an investigator to review possible violations of the ministerial code.

After his mini-budget, Kwasi Kwarteng went to a champagne reception with hedge fund managers.

According to Ministerial Code Section 8.14: "If a Minister meets an external organisation or individual and finds themselves discussing official business without an official present – for example at a social occasion or on holiday – any significant content should be passed back to the department as soon as possible after the event."

It is unknown who would conduct such a review. The position of Truss's adviser on the ministerial code is presently vacant.

Lord Geidt, the previous occupant, said he had been asked to provide advice on "possible law-breaking" and became the second advisor to leave his position under Boris Johnson.

According to Treasury sources, the gathering was a party-political function, making it improper for civil service members to participate. Officials were informed of any substantial government business, they said.

Shops Have Been Struggling Since September

September recorded the worst retail sales increase since shops reopened following COVID restrictions due to inflation, the economic crisis, and an unexpected bank holiday.

It follows a similar negative set of numbers in August, the previous lowest post-COVID retail sales performance.

Here Are the Facts

• The month began with a 3.9% increase in sales, which peaked at 4.9% in the second week before declining to 2.8% and 1.3% in the third and fourth weeks.
• Fashion sales were just 6.7% higher than in September last year when merchants usually anticipate customers spending money on their fall and winter collections.
• Lifestyle sales increased by a measly 1.2%, significantly lower than the sector's previous lowest result since stores reopened in February last year.
• Sales in the homewares sector declined 6.3% in September due to people deferring larger purchases after spending substantial sums updating their houses during COVID lockdowns.

?Read Sophie Michael, head of retail and wholesale at BDO, comment here.

First-Time House Buyers Face Difficulties

Economists predict that housing prices in the United Kingdom will fall by up to 12%, destroying the purchasing power of first-time buyers.

Here Are the Facts

• According to Moneyfacts, a financial data company, the average interest rate on a two-year fixed-rate mortgage has reached 6% for the first time since 2008.
• Halifax mortgage data showed that average property prices declined by 0.1% between August and September.
• ?Capital Economics forecasted that; the average property price will decline by roughly 12% by 2024.
• The Bank of England predicts that inflation will hit 13% in January next year.
• Renters' and first-time buyers' positions are deteriorating, influencing the housing market's forecast.
• By next summer, the average loan-to-income ratio might fall from 4 to 3.7. This would cut the maximum mortgage available to a typical first-time buyer household earning ￡55,000 annually from ￡275,000 to ￡203,000.

?Is There Hope for First-Time Buyers?

The cost of government borrowing increased dramatically after chancellor Kwasi Kwarteng's mini-Budget.

The Bank of England then intervened in the bond market. According to Housing Secretary Liz Truss, the government is assisting first-time buyers by raising the stamp duty threshold.

Mr Kwarteng met with mortgage providers on Thursday. Bank executives asked him to consider extending the government's mortgage guarantee program to help manage the risks of lending to new customers.