The number of households seeking help to deal with court action over their unpaid energy bills has doubled in the last year, according to Citizens Advice.
The charity said suppliers were increasingly opting to take their customers to court to recover their energy debts, which could ruin household finances for years.
Small businesses such as care homes, and enterprises including charities and faith groups, will be granted new protections to guard against rogue energy brokers using rip-off deals to secure hidden commission fees.
The measures mark the first big step by the government and the industry regulator to bring unregulated energy brokers to heel after a growing outcry over aggressive sales tactics and undisclosed commissions, which have inflated costs for small businesses.
The forward-looking parts of the PMI survey suggest construction growth will continue to improve.
New orders grew at the fastest rate since May, with the index rising to 52.6 in March from 50.9 in February. Builders remain upbeat about the outlook for growth even though the future activity balance in the PMI dropped to 68.9, from 72.6 in February.
That March reading remains well above the 2023 average of 63.5, and the average reading between 2015 and 2019 of 66.4, noted Rob Wood, chief UK economist at Pantheon Macroeconomics. He said:
Improving real wages and expected interest rate cuts are proving to be the right medicine to end the construction downturn, with all major sectors of the industry now showing flat or marginally rising output.
Optimism slipping in March is probably a result of markets paring back their expectations for interest rate cuts, but renewed falls in mortgage rates in the coming months should keep builders upbeat. Employment continued to fall, but the index improved to 48.8 in March from 48.1 in February and should continue to gain ground as output growth improves.
Britain’s construction sector returned to growth in March, ending a six-month period of decline.
A survey from S&P Global, the UK construction purchasing managers’ index (PMI), showed a slight increase in overall construction output last month. The index rose from 49.7 in February to 50.2 in March. Any reading above 50 indicates expansion.
Civil engineering was the best-performing area where output increased at a marginal pace. Firms cited increased work on infrastructure projects and resilient demand in the energy sector.
House building and commercial construction activity were both broadly unchanged in March. The stabilisation in residential work represented the best performance for this category since November 2022.
Tim Moore, economics director at S&P Global Market Intelligence, which compiles the survey said:
The near-term outlook for construction workloads appears increasingly favourable as order books improved again in March and to the greatest extent for just under one year. Construction companies generally commented on a broadbased rebound in tender opportunities, helped by easing borrowing costs and signs that UK economic conditions have started to recover in the first quarter of 2024.
Staff hiring was a weak spot for the construction sector in March amid lingering concerns about margin pressures and continued risk aversion among major clients. Construction firms often reported delays with replacing departing staff, which led to a decrease in total employment numbers for the third month in a row.
Supply chain pressures eased across the construction sector as subdued purchasing activity helped to alleviate strains on capacity. Improved supply conditions also led to a slowdown in the rate of cost inflation, which slipped to a three-month low in March.
Yellen voices growing concerns over China's excess industrial capacity
US Treasury Secretary Janet Yellen said today that concerns are growing over the global economic fallout from China’s excess manufacturing capacity, as she started a four-day visit to China.
China is too big to just rely on exports for rapid growth and would benefit by reducing excess industrial capacity, which is putting pressure on other economies, Yellen told 40 representatives of the American Chamber of Commerce in Guangzhou, according to Reuters.
Yellen and other US officials are becoming increasingly concerned about China’s overproduction of electric vehicles, solar panels, chips and other goods that are flooding into other markets, as demand in China has slumped.
The US Treasury Secretary is expected to raise the issue in a series of meetings with Chinese officials this week. She said:
Overcapacity isn’t a new problem, but it has intensified, and we’re seeing emerging risks in new sectors.
She told Guangdong province governor Wang Weizhong that US companies and workers need a “level playing field”.
This includes the issue of China’s industrial capacity, which the United States and other countries are concerned can cause global spillovers.
Some trade experts see the increased US criticism as an initial step towards raising US tariffs on Chinese electric cars and clean energy goods to protect US industry. Yellen has not raised any threats of new trade barriers, but said during her visit to Guangzhou that she would not rule out more actions to protect the US economy from cut-price Chinese imports.
Yellen also said that a financial working group composed of officials from both countries had been working on measures to contain the financial risks from a potential bank collapse in either economy.
We’ve held technical exchanges between our sides, including an exercise on how we would jointly deal with the failure of a large bank in the US or in China.
US Treasury Secretary Janet Yellen speaks during a meeting with China's Vice Premier He Lifeng (not pictured) at the Guangdong Zhudao Guest House, in Guangzhou on 5 April. Photograph: Tingshu Wang/Reuters
Stock markets are sliding in Europe, following in Asia’s footsteps, amid escalating tensions in the Middle East and ahead of key US labour market data, while oil prices have risen slightly.
The FTSE 100 index is down almost 1% at 7,900, and has only three risers at the moment: artificial hips and knees maker Smith & Nephew, British Gas owner Centrica, and the oil giant Shell.
The German, French and Italian stock markets have lost more than 1%. In Asia, Japan’s Nikkei closed almost 2% lower while Hong Kong’s Hang Seng was little changed, and the South Korean market fell 1%.
There were also cautious messages from US Federal Reserve officials yesterday about potential interest rate cuts, with Minneapolis Fed president Neel Kashkari saying that if inflation continues to stall (rather than slowing), there may be no rate cuts at all this year.
Brent crude, the global oil benchmark, is trading 0.2% higher at $90.84 a barrel, closing in on $91.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said:
The FTSE 100 has gone backwards on its last trading day of the week, as investors digest PMI data as well as a downbeat tone over in the US. The major indices all shed between 1.2-1.4% on Thursday, with broad based declines suggesting the malaise is a widespread mood problem, rather than a sector specific issue.
Investors are now looking ahead to today’s US job data which will highlight the strength of the labour market. The narrative around the potential for interest rate cuts has been slightly contradictory this week, so there’s a lot resting on this data to help steady the ship. A looser labour market could help back the argument that the economy is returning to more stable footing.
There is a fly in the ointment, in the form of the storming oil price. This is adding real inflationary concerns back into the market, and isn’t helped by the significant uncertainty that comes with geopolitical tensions.
Brent crude is close to $91 a barrel, as efforts to instigate peace in the Middle East have gone unrewarded. Ongoing reduced supply mandates from OPEC+ are also causing upset to the price. Strong US data has boosted demand expectations too. Fundamentally, oil prices are cyclical, with ups and downs always to be expected. However, the trajectory of the price has been particularly bumpy in recent years and it’s unclear when this will smooth out over the longer-term.
AstraZeneca's Imfinzi shows promise in treating aggressive lung cancer
Britain’s biggest drugmaker AstraZeneca has received a boost, as its blockbuster cancer drug Imfinzi showed positive results as a treatment for aggressive lung cancer in a late-stage clinical trial.
The drug demonstrated a “statistically significant and clinically meaningful improvement” in both the overall survival of patients with limited-stage small cell lung cancer, and the survival of of patients without the disease progressing.
Small cell lung cancer is a highly aggressive form of cancer that typically recurs and progresses rapidly despite initial response to chemotherapy and radiotherapy, with only 15%-30% of these patients alive five years after diagnosis, AstraZeneca said.
Susan Galbraith, executive vice president of oncology research & development at the drugmaker, said:
These exciting results build on the transformative efficacy of Imfinzi in extensive-stage small cell lung cancer and demonstrate the potential to bring a curative-intent immunotherapy treatment to this earlier-stage setting of small cell lung cancer for the first time.
These data… underscore the pioneering role of Imfinzi in the treatment of early lung cancer following chemoradiotherapy.
After ramping up research spending and through a series of smart bets, AstraZeneca has built up a portfolio of cancer drugs that accounts for almost a quarter of the company’s annual revenues.
Imfinzi is already approved for another type of lung cancer as well as gallbladder and liver cancer. However, the drug suffered a setback in a trial in November aimed at expanding its use for another terminal lung cancer.
The firm is hoping that Imfinzi will become a treatment option for more than half of lung cancer patients by 2030.
Test tubes are seen in front of a displayed AstraZeneca logo. Photograph: Dado Ruvić/Reuters
Imogen Pattison, assistant economist at Capital Economics, said:
The first decline in the Halifax house price index in six months confirmed that the slight rise in mortgage rates since the start of the year has caused house prices to stall.
Looking ahead, we expect mortgage rates to remain higher than in January and February and hover at just under 5% over the coming months, which will subdue demand and prevent further gains in house prices. But given public house price expectations are positive, we doubt prices will fall much either.
And if we are right to think that Bank Rate will be cut further than most forecasters anticipate, mortgage rates will fall to below 4% by this time next year, giving house prices a fresh boost.
Anthony Codling, housing analyst at RBC Capital Markets, said:
Mortgage approvals are increasing, wages are rising, and in our view mortgage rates are more likely to fall than rise in the coming months, therefore looking forward we believe the housing markets glass to be half full rather than half empty.
The housebuilders we speak to are confirming our view that consumer confidence is rising and that many of those who delayed their purchasing plans as mortgage rates rose are now taking those plans off ice.
Growing confidence is likely to improve the growth of UK housebuilders’ forward order books which started the year lower than normal, and if current trends continue, this year’s spring selling season could be a very pleasant one.
Housebuilders entered the year with lower than normal forward order books. Empirically there is little correlation between opening order books and full year volumes. Yes the housebuilders have more work to do, but history suggests that they are both willing and able to rise to the challenge especially as, for now, it appears they have the wind behind them rather than ahead of them.
The Halifax survey shows that Northern Ireland remained the region or nation with the highest house price growth in the UK– with prices up by 4.3% on an annual basis. Properties in Northern Ireland now cost an average of £194,743, which is £7,972 more than a year ago.
In Wales, annual price growth slowed to 1.9% in March, from 3.9% in February, with the average home now costing £219,213. Scottish house prices rose 2.1% year-on-year to stand at £204,835.
There is something of a north/south divide in England, with the North West posting the strongest growth, of 3.7% on an annual basis to £232,315.
Properties in eastern England recorded the biggest decline of -0.9%, with homes selling for an average of £330,627, a drop of £2,878 over the last year.
London continues to have the highest average house price in the UK, at £539,917. Prices in the capital have increased by 0.4% over the last year.
Introduction: UK House prices fall for first time in six months
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
House prices across the UK fell by 1% last month following five months of growth, according to Britain’s biggest mortgage lender.
A typical home now costs £288,430, around £2,900 less than last month, said Halifax, which is part of Lloyds Banking Group. The monthly drop, the first since September, came after a 0.3% gain in February.
Compared with a year earlier, prices rose 0.3%, compared to 1.6% last month.
Kim Kinnaird, director of mortgages at Halifax, said:
That a monthly fall should occur following five consecutive months of growth is not entirely unexpected, particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022. Despite this house prices have shown surprising resilience in the face of significantly higher borrowing costs.
Affordability constraints continue to be a challenge for prospective buyers, while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates. This means the housing market is still to fully adjust, with sellers likely to be pricing their properties accordingly.
Financial markets have also become less optimistic about the degree and timing of Base Rate cuts, as core inflation proves stickier than generally expected. This has stalled the decline in mortgage rates that had helped to drive market activity around the turn of the year.
Markets are pricing in a potential first cut in interest rates by June, and a total of three quarter-point reductions by December.
The broader picture is that prices are up year-on-year, reflecting the opposing forces of an easing cost off living squeeze and relatively high interest rates, she said.
Kinnaird predicted that the housing market will remain subdued this year:
Taking a slightly longer-term view, prices haven’t changed much over the past couple of years, moving in a narrow range since the spring of 2022, and are still almost £50,000 above pre-pandemic levels.
Looking ahead, that trend is likely to continue. Underlying demand is positive, as greater numbers of people buy homes, demonstrated by recent rises in mortgage approvals across the industry and underpinned by a strong labour market. And with rental costs rising at record rates, home ownership continues to be an attractive option for those who can make the sums work.
However the housing market remains sensitive to the scale and pace of interest rate changes, and with only a modest improvement in affordability on the horizon, this will likely limit the scope for significant house price increases this year.
Train drivers in England begin a three-day series of strikes today.
Rail passengers across England will face significant disruption as train drivers at five operating companies carry out industrial action.
The 24-hour strike will be the first of three days of rolling strike action being taken by the train drivers’ union Aslef, with services on Avanti West Coast, CrossCountry, East Midlands Railway, London Northwestern Railway and West Midlands Railway all affected.
The five companies have said they will not be running any services throughout Friday and warned that services on Saturday could also be affected.
