‘Making people feel better about their finances will be an important part in Labour turning round in flagging fortunes in the polls’
Energy bills are coming down, at last, but will remain punishingly high for many (Image: GETTY)
With much of Britain finally enjoying spring-like conditions after the truly miserable weather of late, it was an added bonus to have confirmation things are looking brighter when it comes to our energy bills too.
On the face of it, around £117 knocked off the average annual bill is very much what’s needed given so many other pressures on family finances.
It sounds a little less impressive when you consider that’s about £10 a month. And given Ofgem will be updating its price cap in July, those numbers will change.
Another thing to note is that the new cut will apply from April, when the weather tends to improve and households are using less heating.
However, the overall picture for now is that energy bills are heading in the right direction, even if they’re painfully above where they were five years, with little hope of them returning to that level any time soon.
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While we’re talking of reasons for optimism, inflation is finally easing – it’s back down to 3% – and is on track to return to the Bank of England’s 2% target. April’s energy price cut will give it another nudge downwards towards that level.
Interest rates also set to keep falling, with predictions that the Bank of England is gearing up to reduce its base rate to 3.5% at next month’s meeting.
That’s good news for many borrowers, though less so for the army of savers who have been stashing money away for fear of things taking a turn for the worse.
But everyone’s financial situation is unique, and while some bills maybe falling, others are still rising. Take food, where the cost of the weekly shop is still a bit hit to many households’ budget.
And after last year’s surge in water bills, prices will rise again in April, though thankfully by less this time. There is a good chance your broadband or mobile prices will also rise around the same time, along with road tax.
While quoting averages should often come with a health warning, in general workers’ wages are rising faster than inflation. But for many households, it just doesn’t feel that way. Instead, plenty of people scrape through to the end of the month and the next payday.
It is why Labour has made tackling the cost of the living crisis its number one priority. Bringing down energy bills will help feed into that, and has come at a cost as the savings for households has meant shifting it onto general taxation.
Bringing down living costs is a key challenge for governments around the world as the moment. But making people feel better about their lot will be an important part in Labour turning round in flagging fortunes in the polls.