The scam plays on an announcement by Chancellor of the Exchequer Rishi Sunak that the previous £200 energy bill rebate would be doubled and no longer needs to be repaid. The scam encourages people to follow a link to a fake Ofgem website and then asks them to provide personal details and set up a direct debit to receive the rebate.
Fraudsters have also been targeting consumers via email. Action Fraud says it has received around 750 reports of fake emails targeting consumers across just four days.
"The emails state that the recipient is eligible for a rebate as a result of a newly announced government scheme. The links in the emails lead to genuine-looking websites that are designed to steal your personal and financial information,” Action Fraud warns.
BP saw an underlying profit of $4.1 billion in the final quarter of 2021. While in 2020 the oil giant saw a loss of $5.7 billion, in 2021, BP made a profit of $12.8 billion overall as global energy prices rocketed.
Announcing the company’s latest results, BP chief executive Bernard Looney said, “2021 shows BP doing what we said we would — performing while transforming. We've strengthened the balance sheet and grown returns. And we're investing for the future. We've made strong progress in our transformation to an integrated energy company.”
However, the news of BP’s bumper profits will likely prompt a renewed wave of pressure for a windfall tax on fossil fuel companies to fund extra support for households who have been heavily impacted by the steep rise in energy bills. The UK Labour party has said it is “only fair and right” that energy firms making higher profits should pay higher rates of tax.
Last week, rival oil giant Shell reported bumper profits of $19 billion on the same day that Ofgem announced UK households could expect a 54% increase in their domestic energy bills from April.
Consumers on default tariffs paying by direct debit will, on average, see an increase of £693 from £1,277 to £1,971 per year. Consumers who use prepayment meters, meanwhile, can expect to see an increase of £708 from £1,309 to £2,017, on average.
The increase is set to impact around 22 million households in the UK that are on a default standard variable tariff, over which the price cap sets a limit. The new price cap, which comes into effect on April 1 and will remain in place for six months, is the highest since the cap on energy bills was introduced.
Meanwhile, across the channel, the French government is set to force state energy giant EDF to take an €8.4 billion hit to protect households from soaring energy costs by limiting bill increases to 4% this year.
On Friday, the EDF lost a fifth of its market value after the French government laid out its plan to cap rising energy bills. The government’s measures include forcing the energy giant to sell electricity generated by its fleet of nuclear reactors to rival home energy suppliers at prices significantly below the current record-high market prices.
“Fuel stress”, or “fuel poverty”, is a term used when at least 10% of a household’s budget is spent on energy bills, indicating that energy costs are unaffordable.
New research by the Resolution Foundation released on Monday suggests that, while fuel stress is currently at 9%, it is expected to jump to 27% due to the energy price cap rising by more than 50% on the back of rising fuel prices.
In the North East of England and the West Midlands, levels of fuel stress are expected to be the highest at 33% and 32% respectively. Levels of fuel stress in pensioner households are expected to hit 38%, and 35% among those living in local authority housing.
On 7 February, Ofgem will announce the new price cap level, which is expected to be increased to around £2,000.
The Resolution Foundation has called on ministers to do more to support lower-income families through the benefits system. Alternatively, the foundation recommended that an additional payment based on the Warm Homes Discount Scheme (WHD) could be pursued.
Speaking at Leeds University Business School at the start of the week, Broadbent warned the inflation hike will come as regulator Ofgem is likely to increase the UK’s price cap in April of next year.
“Despite relatively weak growth over the past two years as a whole, domestically and globally, inflation has risen very significantly. In this country it was over 4% in October,” Broadbent said, “In the spring of next year, when the next rise in the Ofgem cap on gas and electricity bills comes through, it will probably climb comfortably through 5%, a long way north of the MPC’s 2% target.”
In October, UK inflation stood at 4.2%. Due to a rise in fuel and energy costs, this is its highest level in a decade and comes in at more than double the BoE’s 2% target. Broadbent called the current economic situation an “extremely challenging period for monetary policy.”
Bulb is the largest UK energy company to face difficulties this year. It will become the first energy company to be placed into “special administration” where it is run by the UK government through the regulator Ofgem.
"Customers of Bulb do not need to worry - Bulb will continue to operate as normal," Ofgem said. "Customers will see no disruption to their supply and their account and tariff will continue as normal. Bulb staff will still be available to answer calls and queries."
A firm will only be placed under special administration if Ofgem is unable to find another company to take over an energy firm’s customers, often because the firm is too large to have its customers successfully transferred to another company. Ofgem said it plans to apply to a court to appoint an administrator who will be able to take over the running of Bulb.
Bulb Energy is the seventh-largest energy firm in the UK, with over 1.7 million customers and 1,000 employees.
The Office for National Statistics (ONS) said the rate of Consumer Prices Index (CPI) inflation jumped sharply from 3.1% in September to 4.2% in October. This is the highest level seen since December 2011 and was a much larger rise than expected.
The rise comes after gas and electricity prices in the UK have surged. Last month, regulator Ofgem increased the energy price cap by 12%.
Earlier this month, the Bank of England warned that inflation will soar to its highest level in a decade and that it is likely to hike interest rates in the coming months in an attempt to return CPI to its target of 2%. The Bank of England expects CPI to hit 4.5% in November then reach approximately 5% in April 2022, which would be the highest level since 2011.
“Inflation rose steeply in October to its highest rate in nearly a decade,” Grant Fitzner, chief economist at the ONS, said. “This was driven by increased household energy bills due to the price cap hike, a rise in the cost of second-hand cars and fuel as well as higher prices in restaurants and hotels.
“Costs of goods produced by factories and the price of raw materials have also risen substantially and are now at their highest rates for at least 10 years.”
