We’ve saved.. now we spend, spend, spend
GIANT’S £7.8bn PUSH FOR ‘NET ZERO’
NEARLY half of us have seen our cash savings increase over the past year and collectively we are estimated to be holding an extra £192billion in cash. The figures come from a study by financial mutual Scottish Friendly and the Centre for Economics and Business Research, and the study also reveals that we plan to spend more than a quarter of our lockdown savings over the course of this year. Over a third of those who plan to spend more money this year say their cash will go towards travel and accommodation for overseas holidays while just under a third of those with extra savings plan to spend more on domestic holidays this year. Many sections of the UK economy are set to benefit from a shortterm boost in consumer spending, but not all households anticipate increasing their expenditure. More than 40 per cent said that they have no intention of increasing spending during 2021. Kevin Brown, savings specialist at Scottish Friendly, said: “The extra cash that many Brits have been fortunate enough to save over the past 12 months has been sat idle in bank accounts while people wait for restrictions to be lifted. “A large proportion of Brits clearly intend to enjoy the opportunity to finally spend some of that cash over the comings months on holidays, meals out and in the shops.
“This will provide a welcome boost for many businesses, but it could lead to a sharp spike in prices during the remainder of 2021, which risks hurting many savers.
“If interest rates are kept low, there is a real threat that inflation could rise rapidly above the Bank of England’s two per cent target and be difficult to control.
“If this is allowed to happen, then it will be UK households who bear the brunt of its force.
“Anyone who has money with a bank or building society, could see the real value of their savings eroded in a relatively short space of time.
“The inflationary alarm bells are ringing and households may want to consider moving away from cash to find opportunities for potentially greater investment growth.”
NATIONAL Grid has unveiled a £7.8billion deal to buy Britain’s biggest electricity distribution business in a drive to go green.
The energy giant is buying Western Power – which owns four of our 14 distribution companies – from America’s PPL corporation.
As part of the deal revealed yesterday, it will sell a business it owns in the US, The Narragansett Electric Company, to PPL for £2.7billion.
And, in a further step towards a greener future, National Grid will later begin a process to sell a majority stake in its National Grid Gas arm.
The shake-up marks a big shift in direction for the firm. Electricity will make up about 70 per cent of its assets. Government projections predict 27 per cent of our energy needs will be met by electricity or renewables by 2035.
That’s compared to 23 per cent in 2018.
John Pettigrew, chief executive of National Grid, called the deals “transformational”.
He said: “With increased exposure to the UK’s electricity sector, these transactions enhance our role in the progress towards net zero.”
Laura Hoy, an analyst at Hargreaves Lansdown, said the firm’s future was “electric or bust”. She added: “Not only are homes consuming more, but the boom in electric cars represents an opportunity.”