Sticky UK inflation dents likelihood of further interest rate cuts in 2025, economist says
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
32 minutes ago
- Business Insider
Beat It Musk! Thousands of Brits Aim to Block ‘Unfit' Tesla's U.K. Energy Plan
Thousands of angry Brits have told Tesla (TSLA) boss Elon Musk to pull the plug on plans to enter the country's energy supply market. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Over 8,000 people have asked energy regulator Ofgem to block Tesla from supplying British households with electricity over owner Elon Musk's 'clear political agenda'. License Bid Tesla Energy Ventures is currently trying to get approval for an energy license from regulator Ofgem to supply British households and take on giants such as British Gas owner Centrica and Octopus Energy. If successful, it hopes to start switching on supply next year. Members of the public have until Friday to comment on the application, after which Ofgem will decide whether to grant Tesla a licence to supply electricity. They haven't been holding back. According to campaign group Best for Britain, 8,462 people have used its online tool to lodge objections with Ofgem. The group believes that Musk is not a 'fit and proper' person to have a 'foothold in our essential services.' Best for Britain's chief executive Naomi Smith said: 'We've all had a front row seat to Musk's malign influence, turning Twitter into an incubator for right-wing hate. British people are rightly against Musk being anywhere near our electricity supply and that's why we are encouraging more people to make their views known before Friday.' Tesla has had its troubles this year with its EV arm, faced by stiffer competition and the hit to brand reputation caused by Musk's involved in the Trump administration. This has impacted the company's previous 'tour de force' share price performance. However, it has a burgeoning solar energy and battery storage business and has been an electricity supplier in Texas for the past three years. Good Energy Tesla's energy business saw total energy generation and storage revenue jump 67% year over year to more than $10 billion in 2024. After deploying 14.7 gigawatt hours (GWh) of storage in 2023, Tesla more than doubled this figure to 31.4 GWh in 2024. Its Megapack product – a grid-scale battery storage solution designed for utilities and large-scale commercial customers, has led the way. The company is producing Megapacks at its dedicated Lathrop, California, facility, and recently started production at a second Megapack factory in Shanghai, with a target production of up to 40 GWh of capacity per year. The British business is expected to be branded TeslaElectric and could focus on supplying electricity to consumers who own Tesla products such as cars or batteries. Indeed, according to industry experts, Tesla is in a strong position in the U.K. to start supplying if the license application is approved. It has sold more than a quarter of a million EVs and tens of thousands of home storage batteries, called Powerwalls, in the UK, which could help it gain access to a sizeable customer base for an electricity supply business. Is TSLA a Good Stock to Buy Now? On TipRanks, TSLA has a Hold consensus based on 14 Buy, 15 Hold and 8 Sell ratings. Its highest price target is $500. TSLA stock's consensus price is $307.23, implying an 8.33% downside.
Yahoo
an hour ago
- Yahoo
UK must change Bitcoin rules to catch up with Trump
While Donald Trump pledges to make the US the 'crypto capital of the world' the UK is slipping further behind with outdated Bitcoin regulations, writes Gautam Pillai Rachel Reeves hasn't minced words lately in her pursuit of economic growth. She wants to take the regulatory boot off the neck of British businesses and put the UK 'at the forefront of digital asset innovation'. Fine words, but they don't match the reality. While Donald Trump pledges to make the US the 'crypto capital of the world' the UK is slipping further behind. Take just one example of this: Bitcoin treasury companies (BTCs). As Peel Hunt's research today shows, a new class of publicly listed companies has emerged to provide investors with equity exposure to Bitcoin. These firms raise capital through equity markets to buy and hold Bitcoin. Bitcoin is no longer a fringe, speculative asset. More than 160 public companies have now adopted a Bitcoin treasury strategy, collectively holding around 950,000 coins – more than four per cent of Bitcoin's circulating supply with a market value of over $110bn. But the development of these BTCs is turning into another case study in how the UK risks losing ground to the US and its crypto bro President. The top firms in the US have a combined market value of $130bn, but the top 10 BTCs in the UK are paltry by comparison – less than one per cent of that size combined. Why? The US environment is altogether friendlier. While the US has adopted modern standards that allow companies to reflect the real-time value of digital assets like Bitcoin, the UK is stuck with outdated risk-averse accounting rules that dampen transparency and discourage investors. UK regime is punitive towards Bitcoin Under our accounting rules, Bitcoin is still treated as an intangible asset. That means it is booked in the accounts at the cost of purchase, subject to impairment if the price falls – but the gains cannot be recognised unless the asset is sold. The economic reality is obscured. Investors must dig through footnotes to work out what the company is really worth. It is a regime totally unsuited to a liquid, publicly traded asset. In the US, this changed in 2023 when regulators introduced fair value accounting for digital assets. Gains and losses now go through the income statement, giving investors a clear view and companies a fair shot at reflecting performance. This reform played a critical role in allowing companies like Strategy to become credible Bitcoin proxy stocks, with transparency and investor trust at the core. Strategy is now worth more than $100bn. Meanwhile the UK is in the slow lane. The current treatment of Bitcoin discourages UK-listed companies from holding digital assets, even when it aligns with long-term strategy. It also creates asymmetry for investors. A rising Bitcoin price cannot be recognised, but a falling one must be recorded as a loss. That's not prudent regulation, more punitive. Companies like The Smarter Web Company (SWC) have already seen investor enthusiasm surge after disclosing Bitcoin treasury positions, despite the lack of accounting clarity. Imagine what could happen if UK firms were allowed to reflect fair value directly in earnings. What's missing is the courage to move. This is not a call for a deregulatory free-for-all. Holding Bitcoin in treasury requires robust governance, secure custody and clear disclosures. But none of that precludes updating the accounting standard, allowing more informed investors, attracting capital and sending a message that Britain still backs innovation against US markets stretching their lead. If the Chancellor is serious about loosening the heavy tread of the boot, she should start here. Gautam Pillai is head of fintech research at Peel Hunt Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Impact of new interest rate on household bills, mortgages and savings
UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb. According to official figures from the Office for National Statistics (ONS), the Consumer Price Index (CPI) inflation rate increased to 3.8 per cent in July, from 3.6 per cent in June. The ONS said the rise in inflation was driven by a jump in transport prices, particularly airfares as families jetted off on holiday, and a spike in food prices, with food inflation jumping to 4.9 per cent in July from 4.5 per cent in June as supermarkets faced pressure from global supply chain disruptions and economic uncertainty closer to home. Core inflation, which strips out the more volatile items such as food, alcohol and tobacco, also edged up in the 12 months to July to 3.8 per cent from 3.7 per cent in June. READ MORE: UK inflation rises again in new misery for households as costs rise READ MORE: People urged to 'shop around' for better energy fix before new Ofgem price cap next week However, Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, the online investment platform, warns: 'With inflation continuing to sit well above the Bank of England's (BoE) target of 2 per cent, the latest figures may prompt a more cautious approach from the central bank to further interest rate cuts - despite the recent 25 basis point reduction to 4 per cent. 'An uptick in inflation can be a cause for concern for consumers as it signals ever-higher prices for everyday essentials. This erodes purchasing power, especially for lower-income households, who spend a larger proportion of their income on necessities. 'Add to that the extended freeze on income tax thresholds, which means more of people's earnings are dragged deeper into taxable territory as wages rise - and even a modest increase in inflation can feel unsettling.' The Bank of England expects headline inflation to peak at 4 per cent in September, a forecast that has dampened hopes of another interest rate cut in the near term. Stubborn inflation and concerns over the health of the nation's public finances have led markets to believe that rates may stay higher for longer. However, there are no guarantees. Ms Haines explained: 'The good news is that inflation is expected to ease after September, perhaps with a few blips along the way, though how quickly that will translate into lower borrowing costs remains uncertain - especially with external pressures such as global trade pressures and geopolitical uncertainty still in play. 'What is evident is that wage growth is easing, the jobs market is stalling - as businesses grapple with higher employment costs - and a more subdued growth picture is expected to persist. Any tax increases in the Autumn Budget could further weigh on those prospects.' Impact on household bills The personal finance expert said: 'For consumers facing high household bills or job security concerns, the best defence strategy is a strong financial foundation. 'Living within your means, pausing big-ticket purchases, cancelling unused subscriptions, cutting non-essential expenditure, shifting expensive debts to a 0 per cent balance transfer credit card and building up emergency savings can all help households stay resilient in a high-inflation environment.' Impact on mortgages Ms Haines explained: 'Mortgaged homeowners and first-time buyers may feel disheartened by the latest inflation reading. Rising inflation can dent affordability and reduce their borrowing power, making it harder to secure a mortgage or move up the property ladder.' She continued: 'Rising inflation also puts a spanner in the works for those hoping for mortgage rates to ease more dramatically. Persistent price pressures may cause the central bank to delay further easing. While affordability has improved for buyers in recent months, thanks to lower mortgage rates and lenders relaxing their stress test rules, rates may not be easing as fast as people hoped. 'For existing borrowers looking to refinance, their future repayments will depend on when they secured their current deal. Those emerging from short-term fixes, taken out when rates were high, could find better deals now. But borrowers nearing the end of ultra-low, five-year fixes could face a sharp jump in their monthly repayments, unless they've managed to clear a sizeable chunk of their outstanding balance.' Impact on Savings Ms Haines warned: 'An uptick in inflation won't be welcomed by savers. While higher inflation may slow the pace at which top savings rates disappear - assuming interest rate cuts are delayed - the downside is that rising prices erode the real value of returns. 'Savings rates have already eased back significantly following five BoE rate cuts since last summer - a trend presenting a major challenge for real returns. The bigger issue is the post-tax net return on cash holdings, which is becoming increasingly problematic as more people are dragged into higher tax bands due to frozen personal thresholds.' She added: 'With savings rates likely to fall back further in the months ahead, shopping around for the best deal is key. Rates may be easing, but they remain competitive, which is why savers with sizeable pots must still pay close attention to their Personal Savings Allowance (PSA). 'Higher rate taxpayers only have a £500 personal savings allowance before they must pay tax on the interest they earn - half that of a basic rate taxpayer - while additional rate taxpayers have no allowance at all. This creates a growing tax headache as interest income rises, which is why a tax-efficient savings strategy is a must.'
