3 days Ago
Energy crisis and cold weather concept It’s now nearly two years since Consumer Price Inflation (CPI) peaked at 11.1%, and the cost-of-living crisis was in full swing. We saw rises in the cost of petrol, food, home heating oil, insurance, fuel and mortgages, and few people escaped the effects on disposable income.
Since then, inflation has been in decline, leading to pressure on the Bank of England Monetary Policy Committee (MPC) to cut interest rates. It succumbed, and in August, the rate was cut from 5.25% to 5%, and we’ll hear of its latest decision on interest rates on Thursday — though expectations are that it will maintain a hold position.
For pensioners, this year will be harder following the UK Government’s decision to restrict the £300 winter fuel allowance. In Great Britain, the price cap has been set for combined gas and electricity bills at £1,990. However, our annual bills are tipped by the Utility Regulator to be as much as £110 higher if you’re living in the so-called ‘Ten Towns’ network, due to higher gas prices.
But our electricity prices are expected to be around £120 lower. And even the highest combined gas and electricity bills — from the Regulator’s calculations — won’t be as bad as the £2,650 forecast for the Republic. That’s more than 25% more than what’s expected north of the border.
We’ve spoken to some experts for their take on what’s in store. Firstly, is the cost-of-living crisis over? A spokesperson for the Northern Ireland Consumer Council said: “Some positive indicators are emerging across Northern Ireland in relation to the cost of living crisis, such as consumer’s disposable income increasing slightly, and costs such as fuel and energy decreasing.” But they said households were still less well-off and with less discretionary income than in 2021.
“Northern Ireland’s highest-earning households have on average almost 16 times more discretionary income left to spend every week compared to the lowest earning households, highlighting the disparity in the consumer experience.” According to its household expenditure tracker, half of households have on average less than £93 per week after all essential bills are paid. Its fuel price checker shows petrol and diesel are now the cheapest they’ve been in three years.
“However, prices can vary and consumers should shop around where they can. “Fuel prices are dependent on a number of factors in the global market which can be volatile, so it is difficult to predict what may happen in the coming weeks and months. “For those who are worried about their bills, the Consumer Council offers a variety of information and tools on our website and through our telephone line, such as an electricity and gas price comparison tool, and information on budgeting and what to do if you are experiencing financial difficulties.
” Home heating oil: According to the Consumer Council’s home heating oil price checker, a 500-litre fill is now £295.07 — £83 cheaper than the same time last year. Their spokesperson said: “As demand for home heating oil increases as people begin to top up their tanks for winter, costs are likely to increase.
However, it is unlikely that we will see the highs recorded in 2022 during the peak of the cost-of-living crisis.” Aodhan O’Donnell, founder of price comparison website Power to Switch, said: “Looking ahead to winter, home heating oil prices are expected to stay relatively stable, with the potential for smaller movements in price. This stability really depends on global supply, political factors, and market conditions continuing as they are, though recent years have shown this is anything but a certainty.
“Even local factors can affect the price of home heating oil — almost 70% of homes still use oil so a particularly harsh winter or cold snap can drive up demand and consequently prices.” Mortgages Rachel Springall, finance expert at Moneyfactscompare.co.
uk, said: “There are expectations for mortgage rates to drop further throughout both autumn and winter, but this will depend on swap rate volatility and the possibility of another base rate cut before the year ends. “Fixed mortgage rates fell across the spectrum during August, which will be welcome news for prospective borrowers. Overall, the average two- and five-year fixed rates are back down to levels not seen for over six months.
“Affordability is a pressing point for both homeowners looking to refinance and new buyers, so those struggling to see how they can afford mortgage repayments will no doubt be desperate for interest rates to come down further.” Jordan Buchanan, chief executive of PropertyPal Rent: Jordan Buchanan, chief executive at online portal PropertyPal, said: “The average rent in Northern Ireland has risen to £890 per month, a 9.9% annual increase, or an additional £80 compared to last year.
“While there are tentative signs that rental demand may be moderating, with new enquiries to estate agents down by 8% over the past year, this decline comes from an exceptionally high base...
“The chronic imbalance between rental supply and demand is unlikely to improve substantially in the next six to 12 months, suggesting that rents will continue to rise, albeit at a potentially slower pace.” Insurance Ian Wilson, managing director of comparison website Compareni.com, said: “Thankfully we hope insurance costs will continue to stabilise throughout the autumn and into the start of the winter but I’d encourage people to try and put away whatever extra savings they can as January may be more turbulent.
“Historically January can be an expensive month for insurance, with high volumes of renewals after a normally quieter festive period.” Damian Wilson, founder and CEO of Share Energy Gas and electricity tariffs: Damian Wilson, the founder of Share Energy, a new disruptor in the electricity supply market, said: “Coming into the winter months, there are so many factors that can impact on the stability of prices. “But we are pretty confident in the price we are going into the market with, which is the lowest standard price available of 25.
29p per kilowatt hour.” A spokesman for SSE Airtricity, a supplier of gas and electricity, said: “We continually and actively monitor energy markets and, as we have done before, will reduce our prices as soon as it is possible to do so.” The Utility Regulator said: “We undertook a review of the three regulated tariffs in August (electricity — Power NI and gas — SSE Airtricity (Greater Belfast and west areas) and Firmus Energy (Ten Towns) and concluded that there was no need to make any change.
“However, as wholesale energy markets continue to be unpredictable across the whole of Europe, we will continue to monitor any fluctuations to ensure bills reflect the actual costs of delivering electricity and gas to customers. “We recognise that many households and businesses are still struggling with the cost-of-living crisis.”.
