Burnham cuts VAT on household electricity bills; UK borrows less than expected in June – business live

Key events

VAT trim connected energy bills is affirmative but 'not a cure', power campaigner says

The removal of VAT from energy bills is affirmative but it does not reside nan standard of nan problem that British households are facing, campaigners astatine nan End Fuel Poverty Coalition have said.

Simon Francis, coordinator of nan group, said:

But galore successful nan power manufacture are welcoming Burnham’s move today, including Martin Pibworth, main executive of SSE,:

double quotation markCutting VAT gives contiguous alleviation to homes and businesses and is simply a very invited first measurement to making energy arsenic inexpensive arsenic possible. Electrifying our system is nan measurement we return advantage of cheap, homegrown renewable powerfulness to trim bills, trim power dependence and boost economical growth.

SSE added that its study recovered that 70% of nan summation successful home power bills since 2017 has been driven by world commodity prices and inflation.

Richard Neudegg, head of regularisation astatine Uswitch.com, added that nan removal of VAT connected energy bills successful October could thief households woody pinch world rises successful power prices triggered by nan conflict successful nan Middle East.

double quotation markThere is continued unit connected wholesale prices, driven by nan business successful nan Middle East, meaning it is apt that nan October 1 value headdress will increase.

Some supplier predictions propose nan adjacent value headdress could emergence 5% from October for a family pinch some state and electricity, truthful this taxation alteration could return nan sting retired of a imaginable increase.

There’s still clip for customers to fastener successful important savings earlier wintertime by switching to a good-priced fixed tariff.

The cheapest deals are presently undercutting modular rates by £210 for nan mean household. Doing truthful connected apical of this VAT alteration could time off households considerably amended disconnected complete nan winter.

Introduction: Burnham cuts VAT connected family energy bills

Good morning, and invited to our rolling sum of business, nan financial markets and nan world economy.

New premier curate Andy Burnham has announced this greeting that VAT will beryllium trim from family energy bills, arsenic portion of his scheme to thief pinch nan costs of living.

The PM has said he will region nan levy from 1 October, successful a move that is expected to return astir £45 disconnected nan yearly value headdress group by nan power regulator.

The authorities said nan determination would beryllium funded by savings from nan cancellation of its integer ID programme, which was expected to costs £1.8bn complete nan adjacent 3 years. The VAT trim is estimated to costs astir £850m successful 2026/27 based connected forecasts for energy prices, ministers said.

Burnham said successful a statement:

double quotation markWestminster has not been moving for group for excessively long, pinch families struggling pinch nan costs of living.

That needs to change. I said I wanted to springiness group breathing space, and that’s what I’m announcing connected my 2nd time arsenic premier minister.

We’re taking contiguous action to trim taxes connected power bills, put much money successful people’s pockets and bring backmost hope.

It comes conscionable a time aft Burnham officially became premier curate pinch a promise for a “new economical model” for nan country.

But nan authorities added this greeting that “any further action, including connected backing for longer-term measures, will beryllium taken astatine nan budget, and each decisions astatine that constituent will beryllium funded and besides accordant pinch nan government’s fiscal rules.”

Investors will beryllium watching nan enslaved marketplace cautiously coming arsenic it weighs nan assignment of Burnham’s caller cabinet, including nan astonishment assignment of erstwhile defence caput John Healey as chancellor.

Public assemblage finance figures released this greeting should supply a boost – borrowing for June came successful astatine £15.989bn, beneath expectations of £18bn and down from £23.94bn a twelvemonth earlier.

The quality betwixt full nationalist assemblage spending and income was £16bn successful June 2026, according to information from nan Office for National Statistics. This was £7.9bn (33.1%) little than successful June 2025.

It was £300m little than nan Office for Budget Responsibility (OBR) forecast, mostly because of little inflation-linked indebtedness liking costs.

This should connection immoderate comfortableness to enslaved investors today, alongside Healey’s comments past night:

double quotation markFiscal power is nan first work of immoderate chancellor. It is mine. And fiscal credibility is nan bedrock for economical stableness and for nationalist security, and you heard nan premier curate this day say, successful this much vulnerable world, we will meet our commitments connected defence to our world allies…

The agenda

• 7am BST: ONS Labour marketplace figures and nationalist finances

• Today: New PM Andy Burnham to denote costs of surviving measures