Surprise Drop in UK Inflation Rate

The UK inflation rate has fallen to 2.2% in October according to latest figures from the Office for National Statistics (ONS).

The inflation rate as measured by the Consumer Price Index (CPI) fell to 2.2% in October compared with 2.7% the month before. The fall will come as welcome news to households up and down the country as inflation fell below the forecast rate of 2.5% and has now reached its lowest rate since September 2012.

Transport prices fell by 1.5% between September and October, the biggest fall since July 2009, as supermarkets slashed petrol prices earlier in the year. Both food and education inflation also fell contributing towards the lower rate of inflation which has now edged closer to the Bank of England’s target of 2%.

While the fall in rates comes as good news to UK consumers, the figures are yet to account for the steep rise in energy prices announced by SSE, British Gas and N Power over recent weeks.  

Yesterday, EDF energy was the latest of the ‘Big Six’ energy firms to increase its prices. While their price hike appears modest at an average increase of 3.9%, it will still have a significant effect on households and individuals all over the country.

Which? executive director, Richard Lloyd said:

“While any increase is bad news for hard-pressed consumers, today’s announcement will make people question why other major suppliers have hit their customers so much harder.

“With trust at rock bottom and record numbers very worried about rising energy costs we’re calling on the chancellor to stand up for consumers when he stands up in the House of Commons to deliver this year’s Autumn Statement”

Echoing the statement from Richard Lloyd, energy prices are of course a worry for consumers up and down the UK and it’s important to remember that these price rises are yet to be considered in the latest figures from the ONS.

However, while many expect the significant price increases in energy to counteract the fall in inflation, we can only hope that the drop will remain to translate into consumer confidence and relief for UK consumers and businesses.

Business Confidence Hits 10 Year High

Business confidence in the UK is at its highest level in the last 10 years, according to the Confederation of British Industry (CBI).

The news comes as the UK economy is set to grow faster than any other Western economy, as disclosed by the Institute of Chartered Accountants in England and Wales (ICAEW) this week.

According to a recent evaluation by the CBI, there is a strong economic pick-up in growth in the UK, supported by a predicted growth of 1.4% for this year. Production output was 2.2% higher in September 2013 compared with September 2012 according to the Office for National Statistics, offering credibility to claims by the CBI of a “slow and steady” economic recovery.

HSBC has also this week announced a profit surge of 30% in the three months to the end of September. Pre-tax profit for the bank was reported at £2.8bn and the bank cited “reasons for optimism with some evidence of a broadening recovery” in response to their figures.

The Co-Operative bank, who have now revealed their rescue plan (after the discovery of a £1.5bn hole in its balance sheet, caused by bad loans and the 2009 merger with Britannia building society) which will see the Co-op retain just 30% of shares in the bank, announced plans earlier in the week to reduce its branch network by at least 15% by the end of 2014. While the plans are set to enhance the bank’s internet and mobile services, there will be significant job losses as a result of the decision.

Group executive of Co-Op bank Euan Sutherland commented to the BBC “We do need to take the overall costs down, unfortunately [that] will hit jobs”. Sutherland also added that he was “optimistic” about the future, stating “We have taken a major step forward towards achieving our plan to secure the future of the bank”.

While there are encouraging signs of recovery for the UK economy in the statistics released this week, the news that Co-op is likely to cut jobs while losing control of its banking arm remains to remind us of the fragility of the UK banking sector.

Several UK banks are currently being investigated for currency trading manipulation including HSBC, Barclays, RBS, Citigroup, Deutsche Bank and UBS all of whom have confirmed contact with the Financial Conduct Authority (FCA) regarding their potential role in the latest banking scandal.

Despite claims of “optimism” in the future of the UK economy as well as promising statistics in production output and business confidence released this week, it’s difficult to forget the LIBOR rigging, mis-selling of PPI, money laundering and now tax manipulation scandals which remain to hinder the confidence of consumers all over the country.  

We Fight Any Claim is a claims management company committed to reclaiming compensation on behalf of our customers who were mis-sold PPI by their bank. Call 0844859000 or alternatively fill in an online claim form if you’d like our help and expertise in reclaiming mis-sold PPI.  

PPI Provisions at Lloyds Rise to Reach £8bn

Lloyds TSB is to set aside a further £750 million to compensate customers who were mis-sold PPI it was announced this week. The total amount set aside by the banking giant now stands at £8 billion, the largest provision made by any British bank. Barclays bank meanwhile has this week confirmed that their PPI provisions will remain unchanged at £3.95 billion while announcing an increase in their nine-month pre-tax profits to £2.85 billion. 

Despite the increase in provisions, Lloyds have reported a fall in average weekly complaints from 12,500 per week during the second quarter down to around 11,000 a week during the third quarter of the year, however they noted that complaints have fallen slower than initially projected.

Chief Executive at Lloyds bank, Anthony Horta-Osorio commented “We are well on our way to becoming a better, simpler, low-risk bank, which delivers the products our customers need and the strong performance and sustainable returns our shareholders expect”

Of course the increase in provisions at Lloyds is welcome news which we hope will help the bank work towards refunding the many people who remain out of pocket as a result of Lloyds bank’s mis-selling. However there are still concerns over uphold rates at the Financial Ombudsman Service (FOS) which remain high. On average, during the 6 months between January and June this year the FOS upheld 75% of complaints regarding PPI in favour of the customer and Lloyds’ individual uphold rate during the same period was one of the highest at 90%.

The uphold rates at the FOS have previously been described as “outrageous” and “unacceptable” by Financial Conduct Authority (FCA) chief executive Martin Wheatley, and prove that banks are still failing to treat customers fairly in refunding what is rightfully theirs. In spite of this, the British Bankers Association (BBA) continues to lobby for the enforcement of a time limit on PPI compensation, however has yet to achieve any momentum in their bid to end PPI pay-outs for customers.

The FOS has to date received over one million complaints relating to PPI and while we are pleased to see customers and Claims Management Companies (CMC) taking a proactive approach in escalating their complaints to the Ombudsman, it equally gives an indication into the number of complaints which are being initially rejected by banks. As a CMC specialising in reclaiming mis-sold PPI on behalf of our customers, we hope to see banks dealing with complaints at source, helping customers avoid lengthy timescales in resolving complaints and making the process easier for customers to reclaim what is rightfully theirs.