Cost of living latest: Interest rates will now rise again, experts predict - as new date for inflation falling to 2% forecast (2023)

Key points
  • Inflation falls to 8.7%
  • Cost of living crisis is starting to abate - so why are economists not happy and what could happen next? | Ed Conway
  • Another interest rate rise now 'firmly on table'
  • New prediction for when 2% inflation target will be hit
  • Who's making money from rising food prices?
  • Netflix's crackdown on password sharing starts in UK
  • Your dilemmas:I am paying my dad's mortgage, how do I get added on formally?
  • Budgeting Mum: Saving for your children | Do food subscriptions save you money?| Holiday spending money| Best broadband deals


Tourist attractions to close tomorrow as 900 workers go on strike

Tourist attractions across London are set to close tomorrow as 900 workers stage a 24-hour walkout over pay.

Tower Bridge, Old Bailey, Barbican, museums, gardens, parks and markets will all be affected.

"These people are working in one of the richest places on the planet," saidAnna Lee, GMB union's London region organiser, said. "All they are asking for is a decent pay rise to help with the cost of living."

The staff, who are all members of GMB, have called for the City of London Corporation to return to the negotiating table to settle the dispute.


What are we expecting from the energy price cap update tomorrow?

If you've been following the blog this week, you will have read that the energy price cap is set to be updated tomorrow.

At the moment, the cap sits at £3,280 but it's redundant - the government's Energy Price Guarantee (EPG) is in place and that is set at £2,500.

However, the guarantee ends next month and the cap will come back into force.

Thankfully, due to falling wholesale costs, the price cap is coming down just in time for the EPG ending.

So what are we expecting to see tomorrow?

The respected research specialist Cornwall Insight predicts the new cap will be £2,053 - bringing the typical bill down by around £450 a year from the start of July.

The announcement will set the cap from July to September, and then another review will take place.

While the anticipated fall will be welcome news for many, it will still mean we are paying around £1,000 more than we were before the pandemic.

The cap does not set the maximum a household will pay for their energy but limits the amount providers can charge them per unit of gas or electricity, so those who use more energy will pay more.

It affects customers in England, Scotland, and Wales. In Northern Ireland, suppliers can adjust prices when they want, as long as the Utility Regulator approves it.


Ocado set to fall out of FTSE 100 as shares decline

Ocado has been listed for removal from the top tier of listed firms at the end of the month after its shares fell 34.7% over the last year.

The online supermarket is set to be relegated from the FTSE 100 to the FTSE 250 as part of a reshuffle which takes place every quarter based on the value of stock market companies.

The index changes are indicative and final changes are expected to be announced after markets close next Wednesday.

The company reached its peak during the pandemic as lockdowns forced people into their homes and ordering online became more popular, but as restrictions eased and the cost of living crisis hit, its earnings took a hit.


Ed Conway on what inflation means for economy and mortgages

Want to know what today's higher-than-expected inflation figure means for the UK economy and mortgages (hint, it's not great news)?

If so, you should set aside five minutes to watch data and economics editor Ed Conway explain all at the TV wall...


Marks & Spencer reveals jump in sales but a dip in a profits

Marks & Spencer has revealed a jump in sales, but a dip in annual profits off the back of higher costs.

Profits were nevertheless better than expected and shares in the group shot up by as much as 13% in early trading as a result - the highest for more than a year.

Sales in clothing, homeware and food divisions grew over the year to April, the high street chain said, with bosses hailing the performance as evidence of progress from the retailer's turnaround plan.

The plan has seen dozens of its larger stores close down and better clothing ranges offered to customers.

Total revenues for the business grew by 9.6% to £11.9bn, compared with the previous year.

Clothing and home sales lifted by 11.5% to £3.72bn, after a significant rise in store sales, with shoppers flocking back to the high street after the impact of COVID.



Who's making money from rising food prices?

By Joely Santa Cruz and Ben van der Merwe, data journalists

The Liberal Democrats and the trade union Unite have called on the Competition and Markets Authority to launch an investigation into whether supermarket price rises are a form of profiteering.

This chart certainly raises the question...

But, Kris Hamer, director of insight at the British Retail Consortium, told Sky News: "If you look at the financial results of any of the big food retailers, the margins that they're making are pretty slim. Some of our members are announcing underlying losses, from running their operations.

"So just looking at the numbers, you can see that there's not profiteering going on. I think the question that perhaps politicians ought to be asking is where is the money?

"If you look through the supply chain, who's making money from the point of purchase from the farmer's field through to the [retailers]? The margins are not made in the last mile."

The two biggest supermarket chains, Tesco and Sainsbury's, both reported a decrease in pre-tax profits in the year to March.

Tesco's profits were down by more than half compared to the previous year, while Sainsbury's were down by 5.5%.

By contrast, one of the major suppliers of goods to supermarkets, Unilever, saw its pre-tax profits rise 21% in 2022.

The Competition and Markets Authority said recently that they have "not seen evidence pointing to specific competition concerns in the grocery sector" but are stepping up work in the sector "to be sure that weak competition is not adding to the problems". This includes looking at suppliers and raw material suppliers as well as supermarkets.


Deliveroo riders to challenge bosses over pay and 'insecure jobs'

Deliveroo's riders are challenging their bosses over pay and "insecure jobs" at the food delivery company's general meeting today.

Campaigners at ShareAction and IWGB (Independent Workers' Union of Great Britain) have arranged for riders to raise their concerns over pay levels and worries related to their "independent worker" status.

It comes a month after the IWGB union launched a challenge at the Supreme Court in a bid to secure collective bargaining rights for the firm's couriers.

"Deliveroo riders are dying chasing pennies whilst the CEO Will Shu's prime concern is the safety of his £600,000 salary," Alex Marshall, IWGB president and former courier, said.

Rider satisfaction is at 83% in the UK and retention is around 90%, Deliveroo said, according to its surveys of thousands of riders.


Could UK government intervene to lower food prices?

Well, no, from the sounds of it.

This is another line to come out of the interview with Jeremy Hunt we told you about below.

The chancellor said intervention was not among the options being looked at by the Treasury.

The question has arisen after food inflation remained sky high last month at 19.1%.

"We're doing everything we can to help families and we will continue to try and support people but the one thing we won't do are measures that mean that inflation becomes more persistent or sticky," he said.

"That's why yesterday I had the food producers into Downing Street. We've also been talking to the supermarkets, the farmers, looking at every element of the supply chain and what we can do to pass on some of the reductions in costs that are now beginning to come through to consumers as quickly as we can."


Jeremy Hunt appears to rule out tax cuts in near future

The chancellor, who was interviewed at the Wall Street Journal CEO Council summit, appears to have dashed the hopes of some backbench Tory MPs as he signalled the current high-inflation environment was not amenable to cutting taxes.

"What is a tax cut? A tax cut is putting money in people's pockets so they can spend more. The biggest way that I can put money in people's pockets so they have more to spend is to halve inflation because that is eroding 10% of the value of people's pay packets or has been over the last year.

"So right now, to reflate the economy with further stimulation would mean that monetary policy and fiscal policy were pointing in opposite directions.

"That would be the wrong thing to do.

"If we want to cut taxes in the long run, as all conservatives want to do, because I believe in a low-tax economy, number one task is to get inflation down."

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