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| British Gas price freeze is unlikely to impress customers | |
| (about 3 hours later) | |
| Energy companies are hardly popular at the best of times, but British Gas must have hoped for some praise when it said it was freezing energy prices until August, a timely announcement made on the same day Scottish Power unveiled a 7.8% increase. | Energy companies are hardly popular at the best of times, but British Gas must have hoped for some praise when it said it was freezing energy prices until August, a timely announcement made on the same day Scottish Power unveiled a 7.8% increase. |
| However, the move – which is being funded by cost cutting – could prove to be a temporary respite for consumers, given wholesale prices are still rising. Barclays analysts said: “We expect [British Gas owner] Centrica will have to raise tariffs in August, or face a retail ... margin collapse from 2015’s 7% to less than 3.7% over the next 12 months.” | |
| In any case, the freeze is unikely to deflect the usual criticism about British Gas’s excessive profits when Centrica reports its results on Friday. The UK energy business is expected to see full-year earnings rise from £891m to £950m, with the group’s total profits – including its exploration and US operations – up from £1.11bn to £1.17bn. | In any case, the freeze is unikely to deflect the usual criticism about British Gas’s excessive profits when Centrica reports its results on Friday. The UK energy business is expected to see full-year earnings rise from £891m to £950m, with the group’s total profits – including its exploration and US operations – up from £1.11bn to £1.17bn. |
| There is also the prospect of the government introducing a price cap, given the outrage over energy price rises. Ofcom is already set to introduce a price cap for prepayment customers in April, which analysts say could knock £80m off British Gas earnings. | There is also the prospect of the government introducing a price cap, given the outrage over energy price rises. Ofcom is already set to introduce a price cap for prepayment customers in April, which analysts say could knock £80m off British Gas earnings. |
| And despite its consumer-friendly price move, British Gas is never far from controversy. Last month, it had to pay £9.5m for IT failures that meant business customers received incorrect and late bills. | And despite its consumer-friendly price move, British Gas is never far from controversy. Last month, it had to pay £9.5m for IT failures that meant business customers received incorrect and late bills. |
| National Express gets off the last train | National Express gets off the last train |
| Another area which regularly attracts more than its share of complaints is the rail industry, with delays, cancellations, overcrowding and constant fare increases guaranteed to raise the ire of passengers. | Another area which regularly attracts more than its share of complaints is the rail industry, with delays, cancellations, overcrowding and constant fare increases guaranteed to raise the ire of passengers. |
| But one company set to avoid this in future is National Express. Once the UK’s biggest train operator, it sold its last franchise, the London-to-Essex route c2c, to Italy’s Trenitalia for nearly £73m this month. Operators have become less enamoured of the rail sector, with profits squeezed and tougher franchise terms imposed. | But one company set to avoid this in future is National Express. Once the UK’s biggest train operator, it sold its last franchise, the London-to-Essex route c2c, to Italy’s Trenitalia for nearly £73m this month. Operators have become less enamoured of the rail sector, with profits squeezed and tougher franchise terms imposed. |
| National Express will now concentrate on its coach and bus businesses, and chief executive Dean Finch says the sale provides “the opportunity to invest further in our strong pipeline of growth opportunities in markets where we consistently receive strong returns”. | National Express will now concentrate on its coach and bus businesses, and chief executive Dean Finch says the sale provides “the opportunity to invest further in our strong pipeline of growth opportunities in markets where we consistently receive strong returns”. |
| It has not ruled out returning to UK rail with new franchise bids, but it seems unlikely this will happen in the near future. | It has not ruled out returning to UK rail with new franchise bids, but it seems unlikely this will happen in the near future. |
| The company has promised more details of its future strategy and the implications of the sale of the rail franchise when it reports full-year results on Thursday. | The company has promised more details of its future strategy and the implications of the sale of the rail franchise when it reports full-year results on Thursday. |
| Banks buoyed by Trump bump | Banks buoyed by Trump bump |
| Hints from Federal Reserve chair Janet Yellen last week that US interest rates may soon rise came at the right time for the UK financial sector. In advance of the bank reporting season, share prices have been boosted by hopes that higher rates will boost margins, while the prospect of Trump-inspired economic growth and a relaxation of regulations has also given support to the sector. | Hints from Federal Reserve chair Janet Yellen last week that US interest rates may soon rise came at the right time for the UK financial sector. In advance of the bank reporting season, share prices have been boosted by hopes that higher rates will boost margins, while the prospect of Trump-inspired economic growth and a relaxation of regulations has also given support to the sector. |
| HSBC is the first UK bank to report its 2016 figures, and with much of its business overseas it has been helped by the slide in sterling since the Brexit vote. But investors will be keen to know more about its performance in emerging markets, its cost-cutting, including closing UK branches, and any further regulatory issues. | HSBC is the first UK bank to report its 2016 figures, and with much of its business overseas it has been helped by the slide in sterling since the Brexit vote. But investors will be keen to know more about its performance in emerging markets, its cost-cutting, including closing UK branches, and any further regulatory issues. |
| Lloyds Banking Group, Barclays and Royal Bank of Scotland follow in quick succession, and all but the latter are expected to show solid numbers. RBS, however, is set to report a £6bn plunge into the red after provisions for possible fines – its ninth consecutive year of losses. Lloyds is forecast to report a £4bn profit, up from £1.6bn, but some of the shine will be taken off by the £245m fraud at HBOS, which has left it having to compensate victims. Meanwhile, Barclays could beat consensus forecasts due to foreign exchange movements, according to analysts at Investec. | Lloyds Banking Group, Barclays and Royal Bank of Scotland follow in quick succession, and all but the latter are expected to show solid numbers. RBS, however, is set to report a £6bn plunge into the red after provisions for possible fines – its ninth consecutive year of losses. Lloyds is forecast to report a £4bn profit, up from £1.6bn, but some of the shine will be taken off by the £245m fraud at HBOS, which has left it having to compensate victims. Meanwhile, Barclays could beat consensus forecasts due to foreign exchange movements, according to analysts at Investec. |