Water bills to rise to average £376

Water bills to rise to average £376

Water and sewerage bills are to rise by around £20 from April, regulator Ofwat has said.

The average bill will increase by 0.5% above inflation to £376, taking into account a rate of inflation of 5.2%, the water companies' watchdog said.

The announcement comes after Ofwat pulled back from deep cuts in household bills in 2009 in its final decision on prices for the next five years.

The average water bill will increase
to 376 pounds from April

But the regulator has insisted that its challenge of companies' proposed bill rises means that across England and Wales average bills are set to remain broadly in line with inflation by 2015 - around 10% below what companies had asked for before inflation has been factored in.

Ofwat chief executive officer Regina Finn said: "When we set limits on prices, we listened to customers. They told us they wanted bills kept down while maintaining safe, reliable water supplies.

"We challenged companies hard to deliver this. Our decision meant that, before inflation, average bills would remain broadly stable between 2010-15.

"We understand that any bill rise is unwelcome, particularly in tough economic times. Inflation feeds through into water bills, and this is driving these rises. We will make sure customers get value for money."

She added: "Companies are investing £22 billion by 2015 - more than £935 for every property in England and Wales.

"This will deliver benefits to us all - from continuing to improve reliability of supplies to cleaner rivers and beaches.

"If companies don't deliver on their investment promises, we will take action."

Bank inches towards more QE as global risks loom

Bank inches towards more QE as global risks loom

The Bank of England inched towards pumping more money into the faltering economy in January as the risks from the global economy still loomed large, minutes to the Bank's January 11-12 meeting showed on Wednesday.

The Bank of England is seen against
a blue sky in the City of London October 6, 2011.
REUTERS/Suzanne Plunkett

The central bank's minutes repeated the view that inflation was set to fall sharply in the coming months, though tensions in the Middle East carried the risk of a sharp rise in oil prices.

The 9-member monetary policy committee also noted that some positive developments moderated some of the most serious risks, pointing to the European Central Bank's generous provision of long-term liquidity.

The MPC voted unanimously to hold the target for asset purchases steady at 275 billion pounds and the key interest rate at the record-low of 0.5 percent, where it has been since March 2009.

"For some members, the risks of undershooting the (inflation) target meant that a further expansion of asset purchases was likely to be required," the minutes said in a slightly more assertive tone than last month.

Britain's economy has been moving closer to recession over the past few months though some less downbeat business surveys and retailers' strong Christmas sales raised hopes that the country may avoid another slump.

The Bank reiterated the view that output was likely to be broadly stagnant in the final quarter of 2011 and the first three months of 2012.

Most economists expect the central bank to announce another 50 billion pounds cash injection for the economy in February as the government's hands are tied by its pledge to erase the country's huge budget deficit over the next five years.

Bank governor Mervyn King said in his first key note speech of the year that falling inflation is providing the scope for further quantitative asset purchases if necessary.

The policymakers judged that there was no compelling reason to think that the impact of the current bout of quantitative easing would be materially different from the first round, the minutes showed.

The minutes reiterated the Bank's forecast that inflation would fall sharply in the near-term as one-off effects such as last year's increase in sales tax fell away, though the policymakers also noted the uncertainty in the medium-term.

"There was greater uncertainty about the speed and extent of the fall in inflation thereafter," the minutes said.

Mervyn King predict lower inflation

Some members continued to argue that risks to inflation were overall more finely balanced and it was less clear that it would fall below the target in the medium term.

In particular Bank chief economist Spencer Dale has indicated that he would want to see clearer signs that inflation was coming down as expected before voting for further asset purchases.

Inflation has eased to 4.2 percent in December, down from the three-year high of 5.2 percent hit in September, though still more than twice the central bank's target.

The Bank forecast inflation to fall below 2 percent towards the end of this year. The Britain's large utility companies announced to cut gas and energy prices over the past couple of weeks.


©Reuters 2012