Energy shakeup could cut bills by £45 a year. Ofgem says consumers should pay less towards networks such as National Grid (NG.). The energy regulator has provided some relief from rising energy costs by announcing measures that will reduce bills by about £45 a year from 2021. Ofgem said it would “drive a hard bargain” with companies that run the wires and pipes that supply the UK’s electricity and gas, halving the level of returns they can make. Consumer groups welcomed the move, saying networks had “had it too good for too long” and urging the regulator to “hold its nerve” against the inevitable industry pushback. National Grid shares fell by nearly 4% and the company said it was disappointed by the decision, which it believes does not reflect the “level of risk borne by transmission networks”. The company runs the national electricity grid and accounts for about 3% of a typical bill.
SSE (SSE) and npower scrap merger plan amid ‘challenging conditions’. Government price cap and increasing competition are behind failure to reach a deal. The merger of two of the UK’s biggest energy firms has been called off after npower and SSE blamed the government’s price cap and increasing competition for their failure to reach a deal. Indications that the merger might collapse came in November when the companies admitted they were having to reconsider their terms and would have to inject more capital into the new energy supplier because of changes in the market. SSE, which runs the UK’s second-biggest energy supplier, said on Monday it was considering whether to demerge and list its retail arm, or sell it, but believed it would be best positioned outside of the company. The firm also runs energy networks and power stations.
ASOS (ASC) shares crash 38% after shock profit warning. Downturn for fashion retailer suggests high street malaise is spreading to online companies. Asos has issued an unexpected profit warning after a poor November, becoming the latest retailer to be hit by weak consumer confidence, increased discounting and unusually mild weather. The downturn suggests the high street malaise is spreading to online retailers, with consumers worried about what Brexit will mean for their finances. Shares in Asos crashed 37.5% to £26.14 , the lowest since September 2015 – wiping more than £1.3bnoff the firm’s market value. The rival online fashion retailer Boohoo tumbled almost 20% but cut the loss to about 14% after rushing out a statement saying that trading remained strong.
John Lewis sales rebound as it cuts clothing prices. Chain bucks retail gloom after profit warnings at ASOS (ASC), Bonmarche Holdings (BON) and Superdry (SDRY). John Lewis has bucked the trend for gloomy retail trading updates, reporting a sales rebound last week after discounted clothing lured shoppers back into stores. The department store group, which is owned by staff, said fashion and beauty sales rose 9.3% in the week to 15 December compared with the same period last year. The improvement at John Lewis, which has reported several weeks of declining sales, will steady nerves after days of dire trading updates from retailers in the crucial pre-Christmas period.Monday was a particularly tough day for retail stocks as investors were panicked by an unexpected profit warning from Asos. That came after similar warnings from Bonmarché and Superdry last week, when the Sports Direct boss, Mike Ashley, said the high street risked being “smashed to pieces” by dismal trading in the run-up to Christmas.
