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Today's business and finance round up 20th September 2021

🔥Warnings over winter energy crisis

20th September 2021

Good morning And… they’re back. Yesterday the first ever all-civilian crew safely returned from orbit after a three-day trip. The mission, by Elon Musk’s SpaceX, was far more ambitious and difficult than the other billionaires’ space flights this summer. Jeff Bezos’s Blue Origin flight was the first suborbital all-civilian mission, and Richard Branson’s Virgin Galactic trip was so suborbital that some question whether he was in space at all.

Today's stories

  • Warnings over winter energy crisis

  • Wheels up! Travel boosted by rule simplification

ENERGYWarnings over winter energy crisis

What’s going on?The UK could be in for a particularly chilly winter as gas prices continue to spike putting pressure on households and businesses.Over the weekend the government held emergency talks with energy providers and the regulator, Ofgem, to understand how bad the situation is. This morning there have been reports that the government is considering giving loans to struggling energy companies as more are on the brink of going bust.

Why is this important?

Gas prices have gone up 250% this year and surged by 70% in August alone. It’s a result of the series of calamities that have hit the European energy markets in 2021:

  • Continental Europe is struggling to refill gas reserves before winter, but its chief trading partners Russia and Norway are strategically holding back supply. Liquefied natural gas is being bought up by Asia to meet its own demand, making the shortage worse.

  • The UK has been less windy than usual so wind turbines are struggling to generate power.

  • There are unplanned nuclear outages in France.

  • And to top it off, on Wednesday a major power cable connecting the UK with France caught fire and shut down.

The UK has come under more intense pressure than the rest of Europe due to its high dependence on gas and renewables to generate electricity.Households could see energy bills jump by as much as £400 in a year, according to some estimates. Ofgem has already increased the price cap by £139 to £1,277 per year from October for homes on a standard variable tariff. The next official review is in April, when the cap could rise even higher.There are also huge implications for industry. Meat producers are warning of supply issues as they struggle to get hold of carbon dioxide – the gas used to stun animals before they are humanely killed and also to preserve the shelf life of food. Large fertiliser plants in the UK that produce carbon dioxide as a by-product have shut due to the rising gas prices.TakeawayThe government has tried to reassure the public that there is no cause for alarm. But many are concerned that there could be widespread industry shutdown if energy prices don’t cool down leading to empty shelves and higher inflation.

TRAVELWheels up! Travel boosted by rule simplification

It may at last be time to pack your bags, dust off your passport and head to the airport. After months of confusion and criticism of the traffic light system, the government finally simplified travel rules for England on Friday.Transport Secretary Grant Shapps said the “simpler, more straightforward system” would allow “more people to travel, see loved ones or conduct business around the world while providing a boost for the travel industry.”Online travel agency Skyscanner said it saw a 133% spike in traffic in the 30 minutes following the announcement.Countries will no longer be classed as red, amber or green. Instead from 4th October, there will be a two-tier system, with several dozen countries where Covid-19 is widespread classed as red, and the remainder as open. Fully vaccinated arrivals to England from open countries will no longer have to take a Covid-19 test before travelling. Travellers will still need a test after landing, but from the end October a cheaper lateral flow test will suffice, rather than the more expensive PCR test.In a boost to tourism, UK said it will recognise vaccinations given in 17 more countries, including Australia, Canada, Japan and South Korea. It previously had recognized only doses given in the UK, the US and EU.The travel industry has complained that the UK’s complicated and expensive requirements are keeping people away and hampering recovery from the pandemic. Heathrow Airport said that it had fallen from Europe’s busiest airport in 2019 to 10th-busiest now, behind rivals in cities such as Amsterdam, Paris and Frankfurt.

Stat of the day

Platform, part of the Co-operative Bank, has launched the UK's lowest ever mortgage rate at 0.79%

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