Oil prices climb to fresh highs, UK petrol price hits record – as it happened

Last modified: 02: 39 PM GMT+0

Closing summary

Time to wrap up... here are today’s main stories:

Meanwhile, Facebook whistleblower Frances Haugen is currently testifying to UK MPs and peers. She told them Facebook is “unquestionably making hate worse”, and you can follow all the action over on our Politics Live blog with my colleague Andrew Sparrow:

Please join us again tomorrow, when my colleague Julia Kollewe will be at the helm. JP


Updated

Thousands of retirees are in line for state pension payouts amounting to £60.8m, according to a government checking process between January and September this year.

A new report from the Department for Work & Pensions found 9,491 people were underpaid their state pension by up to £8,628 per pensioner, as a result of calculation errors.

The DWP is facing urgent calls to compensate those affected after the National Audit Office, the spending watchdog, revealed last month 134,000 pensioners were owed a total of £1.053bn, due to repeated errors by the department. The majority of those affected are understood to be women.

Estimates of the total number of underpayments and the forecast expenditure over the entirety of the DWP exercise will be revealed in Wednesday’s budget.

The DWP is under fire for a separate scandal over delays to state pension payments to thousands of new pensioners caused by administrative problems during the pandemic.

Amid soaring petrol and diesel costs, and the introduction of more restrictions or costs for the use of older, more-polluting vehicles -such as the Ultra Low Emission Zone (ULEZ) which comes into force today in London - drivers across Europe are increasingly turning to battery electric vehicles.

Tesla’s Model 3 was the bestselling car across Europe in September, the first time a battery electric vehicle has topped the monthly sales charts in the region.

Tesla’s Model 3 becomes the top-selling vehicle in Europe, the first time an electric car has outsold rival models with petrol engines https://t.co/I171GBcZaD

— Bloomberg (@business) October 25, 2021

Tesla sold 24,600 Model 3 cars during the month, taking a 2.6% market share that meant it outperformed established internal combustion engine models such as Renault’s Clio or Volkswagen’s Golf, according to figures collated by Jato Dynamics, an automotive data company.

However, sales of petrol cars still dominate across Europe because of the lack of affordable battery electric vehicles but there has been a big switch away from diesel because of scandals related to air quality.

You can read Jasper’s story here:

If inflation continues to rise next year above current levels, as many predict, even a 6.6% rise in the national living wage may not make many low earners feel much better off.

The government’s proposals “still fall some way short of a properly calibrated living wage,” according to Dr Mat Johnson, senior lecturer in employment studies at Alliance Manchester Business School.

He added: “The real living wage rate - due to be announced by the Living Wage Foundation next month - is likely to be above £10 across the UK”.

A rise of 6.6% for those on the minimum wage is actually quite modest as inflation is expected to hit 5% early next year - Dr Mat Johnson, senior lecturer in employment studies at Alliance Manchester Business School

Dr Johnson is among those highlighting how the increase in the national living wage may not necessarily offset the cut in universal credit, combined with higher tax and National Insurance contributions.

He added:

A more progressive move would be to harmonise minimum wage rates across age groups. While the adult rate has been lowered to cover 23-year-olds and above, it should be extended to younger adults who face sharp cost of living pressures when it comes to rent, food and utilities.

More reaction is coming in from trade unions, economists and analysts to the increase in the national living wage and the minimum wage from next April.

Frances O’Grady, general secretary of the Trades Union Congress (TUC) said a boost to the minimum wage was vital “in the middle of a cost-of-living crisis”

But the government must set its sights higher. We need a £10 minimum wage now, and we need ministers to cancel the cut to universal credit. This increase won’t come into effect until next spring by which time many household budgets will have been hammered by rising bills and the universal credit cut - Frances O’Grady, TUC general secretary

O’Grady is also calling on the chancellor to end the pay freeze for public sector workers on Wednesday in his spending review.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), is also disputing the government’s claim that the rise in the national living wage will see low earners £1,000 a year better off.

Obviously not true in any seriouse sense. £1,000 gross not net. Anyone on UC will lose much more than half of that. Lots of people on UC are not on NLW. Etc etc https://t.co/mExJb5YgAD

— Paul Johnson (@PJTheEconomist) October 25, 2021

And the Women’s Budget Group, an independent non-profit which monitors the impact of government policies on women, is highlighting the impact of the cut to universal credit for people with caring responsibilities.

Increasing the NLW is good in itself. But it doesn't make up for cut in UC for those who can't do paid work, or have a part time job because of unpaid care work. https://t.co/a1iWDcZ8yb

— Women's Budget Group (@WomensBudgetGrp) October 25, 2021

Small business owners also have a view

Small businesses say Chancellor will claw back a lot of the higher national living wage so he should support the small businesses who have to pay it. pic.twitter.com/Jnl3mpavgM

— Paul Lewis (@paullewismoney) October 25, 2021

Updated

In other news today, the UK’s largest mobile phone networks have agreed to start automatically blocking calls made from abroad that look like they are coming from a UK number, in a bid to crack down more on foreign scams.

The communications regulator Ofcom, said it had been working with telecoms companies to tackle the “complex problem”.

It said fraudsters have been getting more sophisticated and able to ‘spoof’ numbers of large companies and organisations, so it looks like a call is coming from them when it isn’t.

Lindsey Fussell, Ofcom’s networks and communications group director, said:

Tackling this complex problem requires a coordinated effort from the police, Government, other regulators and industry. We’ve been working with telecoms companies to implement technical solutions, including blocking at source, suspicious international calls that are masked by a UK number. We expect these measures to be introduced as a priority, and at pace, to ensure customers are better protected.

The announcement comes just days after Ofcom revealed that 45m people in the Uk had been targeted by scam calls and texts over the summer. It added it was particularly concerned about what it called a “significant rise” in fraudulent communication over the past 18 months.

You can read the full story by my colleague Kalyeena Makortoff here:

The UK's national living wage is to increase to £9.50 next year - the government says

The UK’s lowest-paid workers aged 23 and over will see their wages rise to £9.50 an hour from 1 April 2022.

The Treasury now says it expects the chancellor Rishi Sunak to confirm the rise in his budget on Wednesday.

The government says this 59p an hour boost means that a full-time worker who earns the National Living Wage will earn an extra £1,000 a year.

Younger people are also getting a payrise. From April people aged 21-22 will see their national minimum wage rate go up by 82p to £9.18 an hour.

The minimum wage for an apprentice is also being increased - moving from £4.30 an hour to £4.81 an hour for an 18 year old apprentice in a sector like construction.

Rishi Sunak, the UK chancellor said:

This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.

However some warn that people who work and claim universal credit will end up seeing lower pay increases than they might anticipate.

Meanwhile hospitality firms are warning that higher wage bills may lead to firms hiking prices at venues like restaurants and cafes.

Rise in National minimum wage from April. The full table. Remember those who work and claim Universal Credit will get much lower net increases as UC is tapered away and tax and NI will also be due for many. But of course it is good news, though some businesses may not agree. pic.twitter.com/cZq3x0wiY5

— Paul Lewis (@paullewismoney) October 25, 2021

We’re waiting for confirmation from the UK government on how much the minimum wage is going to go up by from April 2022.

The increase is expected to be announced soon, and will reportedly rising by more than 5% to £9.42, from the current £8.91 level for people aged 23 and over.

The move would see ministers accept the recommendations of the independent body, the Low Pay Commission, which has been looking at the possibility of raising it by these levels.

Such an increase would mark an above-inflation increase, but coming at a time when consumers are facing higher energy bills and seeing rising prices.

Ministers will also hope that this increase would offset the cut in universal credit which has also hit low-paid workers.

The chancellor Rishi Sunak is expected to confirm in his budget on Wednesday that the government wants the national living wage to move above £10 by the next UK election.

Here’s the full story from our deputy political editor, Rowena Mason:

A quick lunchtime look at the European stock markets which have been climbing slightly again this morning, and holding steady close to six-week highs.

Most European stock indices have inched upwards so far today, led by banking, energy and healthcare stocks. Meanwhile, investors are poised for a full week of earnings reports from some of the world’s biggest companies, including top US tech firms, with Facebook up first later today.

Just before 1300 BST:

  • UK’s FTSE 100 is currently up 0.4% at 7,233 points
  • Germany’s DAX is up 0.26% at 15,586
  • France’s CAC 40 has dipped 0.19% lower to 6,721
  • The pan-European STOXX 600 is broadly flat at 472

A busy week of third quarter earnings lies ahead, including results from the likes of Microsoft, Apple and Google parent company Alphabet, and also from financial institutions including Lloyds and Deutsche Bank.

US futures are also nudging higher as investors wait to see Facebook kick off the quarterly round of Big Tech earnings.

Soaring energy prices, supply chain disruption and rising Covid-19 cases are weighing on business sentiment in Germany, just as they have been in the UK.

Catching up on the release of the Ifo institute’s business climate index from earlier this morning, morale among companies in Europe’s largest economy slipped for the fourth month in a row in October.

This combination of challenges is slowing the pace of recovery from the pandemic, pushing down business sentiment. The Ifo reading came in lower than expected and marked the worst level in six months.

OUCH! German Ifo Business Climate tumbles to 6mth low on supplies. Ifo Index worsens to 97.7 in Oct vs. 98 expected w/Ifo Expectations Component plunged to 95.4, lowest since Feb. Weakness spilling over to services amid higher prices. Current Assessment at 100.1 vs 99.4 expected. pic.twitter.com/rXEiXYtZOi

— Holger Zschaepitz (@Schuldensuehner) October 25, 2021

Supply problems are giving businesses headaches, said Ifo president Clemens Fuest.

The disappointing October Ifo reading comes as Germany’s central bank, the Bundesbank, warned of economic growth slowing considerably between October and December.

The Bundesbank expects full-year growth in the country to end up “significantly” below the 3.7% forecast it made in June.

Meanwhile Ifo found that half of all German industrial companies are planning to raise their prices as a result of continuing supply problems, a record high reading for the survey.

Supply headaches sink German business morale to six-month low https://t.co/MN7gzcC6cg #Germany #economy #Ifo #Bundesbank

— Michael Nienaber (@mcnienaber) October 25, 2021

After Tesco’s website and app were down for most of the weekend, leaving many frustrated customers unable to shop online, HSBC’s business banking portal (called HSBCnet) had some issues this morning.

Large corporate customers only had intermittent access via the website or app for about an hour, from 9.10am, but the problem has been fixed, according to HSBC.

It is currently unclear what caused the issue, which affected hundreds of business customers in the UK.

Record petrol prices in the UK are proving quite the talking point this morning.

It’s a “dark day for drivers” according to motoring organisation the RAC.

According to the RAC’s Fuel Watch data, the price of unleaded petrol has soared by 28p a litre in a year, from 114.5p in October 2020. They calculate this adds £15 to the cost of filling up a 55-litre family car - taking it from £63 this time last year to £78.61 now.

The oil price has risen in the last few months as global demand has rebounded, however the RAC also found that petrol retailers have increased their average margin on each litre of fuel sold as they try to claw back some of the earnings they lost during lockdowns when sales plummeted as people stopped travelling and people stayed at home. Retailers’ average margin has gone up from around 5.5p a litre to 7.5p now, the RAC said.

In addition, the switch in September to greener E10 petrol is also playing a role in pushing up the price of petrol. Last month, the bio content of unleaded petrol saw the ethanol content increase from 5% to 10%. Ethanol is more expensive than petrol, adding around a penny a litre to the cost at the pump.


RAC fuel spokesman Simon Williams said:

This is truly a dark day for drivers, and one which we hoped we wouldn’t see again after the high prices of April 2012. This will hurt many household budgets and no doubt have knock-on implications for the wider economy.

Williams added that people on lower incomes who have to drive to work will struggle to find extra money to pay for fuel.

The RAC is calling on the government to temporarily reduce VAT to help ease the burden, and is asking larger petrol retailers to reduce their margin on the fuel they sell back to pre-pandemic levels.

Here’s the full story on the UK record petrol price from our energy correspondent Jillian Ambrose

On oil prices - how high are they expected to go as demand for energy rebounds in the world’s economies?

Brent crude prices might even move above the $90 a barrel - previously forecast to be reached by the end of the year - according to researchers at Goldman Sachs.

The US investment bank said in a research note that it expects demand for oil to soon reach the pre-Covid level of 100 million barrels per day, as appetite in Asia for oil returns after the region was hit by the wave of Delta Covid-19 cases.

The Organization of the Petroleum Exporting Countries and allies, led by Russia and known as OPEC+, said earlier this month they would continue the existing deal of boosting output by 400,000 barrels per day each month until at least 2022.

“We would need prices to rise to $110 /bbl to stifle demand enough to balance the market deficit we currently see in 1Q22 given our expectation that OPEC+ continues on the current path of +0.4 mb/d per month increases in quotas,” Goldman said in a research note which was dated 24th October.

Oil prices climb again, hit multi-year highs amid tight supply

Oil prices are on the rise again, following last week’s climbs, as supply remains tight amid growing demand from economies recovering from the pandemic.

Brent crude futures increased by $0.56 to reach $86.09, hitting a three-year high during Monday morning trading. The move followed on from a 1% increase on Friday.

US West Texas Intermediate (WTI) crude future also climbed early on Monday by $0.62, taking them to $84.38 a barrel. Earlier in the session, they have briefly hit their highest level for seven years.

Global oil supply remains tight, just as demand is increasing in the United States and elsewhere as economies using more energy again as they jerk back to life following the pandemic, when demand slumped.

Meanwhile fuel prices are also climbing again for motorists, and the price of petrol in the UK has hit a new record.

Petrol reached 142.94p a litre on Sunday, according to motorists organisation the AA, slighting edging above the level seen in April 2012.

Diesel has also moved higher to reach 146.5p a litre - just over 1p short of its all-time high from April 2012.

RAC: The average price of petrol hit a new record high in the UK of 142.94p yesterday (Sunday 24 October), exceeding the 142.48p a litre all-time peak reached on 16 April 2012.

— Peter Hoskins (@PeterHoskinsTV) October 25, 2021

The record petrol price level was recorded just hours before motorists with older cars who live or travel within London’s newly-extended Ultra Low Emission Zone started to face a new daily charge.

From Monday, drivers will have to pay £12.50 each day they drive an older car which doesn’t comply with emissions restrictions anywhere in the capital’s ULEZ.

From today, our city's ULEZ is expanding.

This move will accelerate London's transition to a zero emission transport network, clean up our toxic air and protect millions more Londoners from air pollution. This is what taking action against the climate emergency looks like.

— Mayor of London, Sadiq Khan (@MayorofLondon) October 25, 2021

Tesco's app and website are working again after weekend disruption

Tesco’s app and website are back up and running again this morning.

It comes after its services were disrupted over the weekend by hackers, leaving thousands of shoppers unable to buy groceries online.

Britain’s largest supermarket confirmed just before midnight last night that customers could once again fill their virtual baskets, as well as amend existing orders and book deliveries.

A Tesco spokesperson said: “Our online grocery website and app are now back up and running. Our teams have worked around the clock to restore service, and we’re really sorry to our customers for the inconvenience caused.”

Tesco - which receives 1.3m online orders each week - first experienced problems on Saturday.

A screenshot of the message on Tesco’s website over the weekend after it was hit by hackers
A screenshot of the message on Tesco’s website over the weekend after it was hit by hackers Photograph: Tesco

The retailer said over the weekend it didn’t believe the attempt to interfere with its systems had impacted customer data.

Tesco was hacked previously in 2014, and had to deactivate online customer accounts after more than 2,000 login details, including passwords, were posted online. A separate attack on Tesco’s banking arm resulted in the loss of £2.5m two years later.

Updated

In other banking news this morning, the Co-operative Bank has confirmed weekend reports that it had made an approach to the owners of TSB, expressing an interest in buying its competitor.

The Co-operative Bank said in a statement it had sent a letter to TSB’s owner, Spain’s Banco de Sabadell.

However Co-op said “no discussions in relation to a potential transaction are currently taking place between the Bank and Sabadell”.

Nick Slape, Co-operative Bank’s chief executive said:

Our unique brand, underpinned by co-operative values and ethics and the significant progress we have made in returning our bank to profitability is a testament to the hard work of our colleagues and the loyalty of our customers - which we continue to place at the heart of all our decisions.

Britain's Co-op bank confirms TSB approach https://t.co/fOdJFAYcmc pic.twitter.com/R6VyzQkccD

— Reuters Business (@ReutersBiz) October 25, 2021

Spain’s Sabadell said over the weekend it had rejected the Co-op Bank offer. The lender confirmed its board had officially responded to Co-operative Bank that “this is not a transaction that we wish to explore at this moment as we have previously expressed publicly”.

Spain's Sabadell rejects offer from Co-op bank for its British unit TSB https://t.co/EAf81hvG0P pic.twitter.com/5HygaMaARf

— Reuters Business (@ReutersBiz) October 23, 2021

It’s the second time that Co-op has shown an interest in snapping up its rival, a deal which would have created one of the UK’s largest high street banking chains. Co-op originally tried to buy the TSB branch network in 2013, when its then owner Lloyds was looking for a buyer.

However Co-op’s attempt fell apart after it was hit by a string of scandals and it merged that the bank had a £1.5bn black hole.

TSB was then bought by Banco de Sabadell in 2015. Since TSB left the Lloyds banking group, it also hit the headlines for all the wrong reasons amid an IT meltdown in 2018.

My colleague Kalyeena Makortoff has the full story on HSBC’s results here:

British-headquartered bank HSBC managed to shrug off concerns about bad property debt in its key Chinese market as it beat City forecasts with its third quarter earnings.

HSBC surprised with a 74% rise in profits, after improving economic conditions allowed the bank to release hundreds of millions of pounds originally set aside for a potential jump in loan defaults during the pandemic.

The lender said pretax profits rose to $5.4bn (£3.9bn) in the three months to 30 September, up from $3.1bn a year earlier.

HSBC said improving economic conditions meant that customers were able to repay their debts on time, helping it to increase its profits. This has allowed HSBC to release about $700m from the pile of cash it built up during the pandemic, designed to help cushion the blow of any potential surge in defaults.

It has also enabled HSBC to announce a share buyback of $2bn.

Introduction: Shares in Evergrande rise as firm looks to electric vehicle future

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Shares in China’s Evergrande Real Estate rose on Monday morning after the embattled firm’s chairman indicated the company would be concentrating in future on its growing electric vehicles unit rather than its troubled core property business.

The company, which has debts of about $305bn, managed to swerve a costly default last week as it came up with the money to pay a bond interest payment at the last minute.

Shares in Evergrande rose by as much as 6% so far during Monday trading, while shares in its electric vehicles unit – China Evergrande New Vehicle Energy Group – leapt by 17% at one point after Evergrande’s chairman said it would make the new vehicle venture its main business, although both firms later lost some of their gains and Evergrande stock is currently flat.

According to state media, Hui Ka Yan said on Friday that electric vehicles would overtake the business’s previous property focus within the next decade, a strategy which looked to prove popular with investors.

Shares of China Evergrande's electric-vehicle unit jump after the chairman of the indebted property giant says making such cars would become its main business within a decade https://t.co/OIHN0D3l49

— Bloomberg Asia (@BloombergAsia) October 25, 2021

Evergrande’s vehicle business was founded in 2019 but hasn’t yet displayed any of its planned models or sold a single car.

Evergrande, which is China’s second-biggest property developer, sparked alarm on global financial markets in September, when it announced that it might not be able to pay its many creditors ranging from homebuyers, building contractors, banks and offshore investors.

On Friday it was reported that the firm had wired a $83.5m bond interest payment that it missed in September.

Some Evergrande bondholders received coupon payment for Sept 23 tranche -sources https://t.co/CjjTk3SUgR pic.twitter.com/3RSdvR4Q9C

— Reuters (@Reuters) October 25, 2021

Evergrande said on Sunday it had restarted work on 10 projects across six cities including Shenzhen. Some construction had been halted during the summer because of delayed payments to suppliers and contractors.

Good news, homebuyers. Evergrande says it's restarting construction on more than 10 real-estate projects after just barely making that USD bond payment last week. It's also going to finish its massive Guangzhou soccer stadium, it says.https://t.co/T7R7KOy8b0

— Jonathan Cheng (@JChengWSJ) October 25, 2021

Concerns in Evergrande haven’t entirely gone away, however, although Chinese state media reported on Monday that any spillover from the country’s property debt into the financial industry is controllable.

In a comment published by Xinhua news agency on the Chinese economy, including information attributed to “relevant departments” and “authoritative people”, it was reported that property companies were facing potentially defaulting on their debts because of poor management and a failure to adjust to market changes.

The agenda

  • 9am BST: German ifo business climate index for October
  • 2pm BST: Bank of England MPC member Tenreyro delivers a speech at the Centre for Economic Policy Research’s conference on international trade, global supply chains and monetary policy
  • 10pm BST: Facebook releases Q3 results

Contributors

Joanna Partridge

The GuardianTramp

Related Content

Article image
Wall Street hits record high, as Iran tensions send oil price up - as it happened
Bank of England warns that Brexit risks are rising, but investors are cheered by prospect of US interest rate cuts.

Graeme Wearden

20, Jun, 2019 @8:22 PM

Article image
UK petrol prices near record; inflation dips; bitcoin hits new high – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

20, Oct, 2021 @4:47 PM

Article image
‘Eerie silence’ as Evergrande misses payment deadline
As debt-laden Chinese property giant enters 30-day grace period, officials look to limit unrest and job losses

Vincent Ni and Julia Kollewe

24, Sep, 2021 @8:06 AM

Article image
Evergrande: will it collapse and what would happen if it did?
If Chinese property company Evergrande sinks under its $300bn debt its failure would resound across the global economy

Vincent Ni China affairs correspondent

21, Sep, 2021 @5:29 PM

Article image
Further quantitative easing in doubt as petrol prices near record high
The Bank of England could be prevented from boosting the economy with another round of QE if inflation rises

Phillip Inman, economics correspondent

10, Sep, 2012 @5:56 PM

Article image
FTSE 250 hits record high amid buyout spree and factory boom – as it happened
Rolling live coverage as UK manufacturing PMI signals continued output growth despite supply chain struggles

Jasper Jolly

02, Aug, 2021 @2:08 PM

Article image
China’s indebted property sector highlights a fading economic revival
Xi Jinping’s mission is not only to control the housing bubble, but rein in untethered industries and foreign capital

Phillip Inman

08, Dec, 2021 @8:07 PM

Article image
Global markets at record highs; bitcoin hits $50,000 – as it happened
Rolling coverage of the latest economic and financial news

Graeme Wearden

16, Feb, 2021 @7:01 PM

Article image
Pound edges higher against the dollar while oil rises on Iran sanctions - as it happened
Sterling still struggling on fears of a no-deal Brexit but recovers some of Monday’s losses

Nick Fletcher

07, Aug, 2018 @1:46 PM

Article image
UK inflation hits six-month high as petrol and energy prices rise
TUC says jump to 1.8% would put squeeze on living standards at time of falling wage growth

Phillip Inman

19, Feb, 2020 @7:21 PM