{"id":30101,"date":"2025-05-28T07:32:07","date_gmt":"2025-05-28T06:32:07","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2025\/05\/28\/news-in-review-205\/"},"modified":"2025-05-28T11:39:49","modified_gmt":"2025-05-28T10:39:49","slug":"news-in-review-205","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2025\/05\/28\/news-in-review-205\/","title":{"rendered":"News in Review"},"content":{"rendered":"
\n
The CPI rate of inflation rose to 3.5% in April\u2014above forecasts\u2014driven by energy, services and air fares <\/td>The \u00a320,000 ISA limit is to remain but changes to the cash ISA component are under review <\/td>The government is expected to expand eligibility for winter fuel payments in the Autumn Budget <\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n
\n
\n

\u201cApril\u2019s rise in inflation was widely expected\u201d <\/em><\/strong><\/p>\n<\/div><\/blockquote>\n<\/div>\n\n

\n

The latest inflation data from the Office for National Statistics (ONS) shows the Consumer Prices Index (CPI) rose by 3.5% in the 12 months to April 2025, a sharp increase from the 2.6% reading in the 12 months to March.\u202fThis uptick was higher than expectations, with a Reuters poll of economists predicting 3.3% and the Bank of England (BoE) 3.4%. It marks the highest rate in over a year.<\/strong> <\/p>\n<\/div>\n\n

\n

During the month (April), CPI rose by 1.2%, compared with a rise of 0.3% the previous April. The pickup in the rate can be attributed to increases in household bills, with electricity, water and gas prices increasing on 1 April. Service price inflation also leapt 5.4% in the 12 months to April, outpacing expectations of between 4.8-5.0%. In April, service prices elevated 2.2%, representing the largest increase in 34 years. <\/p>\n<\/div>\n\n

\n

Air fares also contributed to the increase. ONS noted that the timing of the Easter holiday, which fell in April this year, likely contributed to the sharp rise in fares – up 27.5% from March – marking the second-largest monthly increase for April ever recorded. <\/p>\n<\/div>\n\n

\n

The BoE expects inflation to peak at 3.7% between July and September. <\/p>\n<\/div>\n\n

\n

Principal Economist at the CBI Martin Sartorius said, \u201cApril\u2019s rise in inflation was widely expected, driven by a perfect storm of price pressures such as higher employer National Insurance contributions, the National Living Wage increase, and a hike in the Ofgem price cap. Looking ahead, the Bank of England expects that inflation will stay above 3% this year, as these pressures continue to impact household\u2019s cost of living. This suggests that the Monetary Policy Committee is likely to hold rates in its next meeting, especially after May\u2019s finely balanced decision to cut. Beyond then, the MPC will reduce borrowing costs at a gradual pace, as it assesses how price pressures are developing in the economy.\u201d<\/em> <\/p>\n<\/div>\n\n

\n

ISA allowance to be preserved<\/strong> <\/h2>\n<\/div>\n\n
\n

Last week, Rachel Reeves confirmed the \u00a320,000 annual limit on ISAs (Individual Savings Accounts) will not be reduced, as widely speculated. However, she did not directly rule out the idea of cutting the cash ISA allowance while retaining the overall limit. <\/p>\n<\/div>\n\n

\n

Some have speculated that the cash allowance could be cut to encourage people to invest instead and kickstart economic growth, one of the government\u2019s primary objectives. The Chancellor commented, \u201cI\u2019m not going to reduce the limit of what people can put into an ISA, but I do want people to get better returns on their savings, whether that\u2019s in a pension or in their day-to-day savings.\u201d<\/em> <\/p>\n<\/div>\n\n

\n

She continued, \u201cAt the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people. But I absolutely want to preserve that \u00a320,000 tax-free investment that people can make every year.\u201d<\/em> <\/p>\n<\/div>\n\n

\n

The Chancellor is expected to announce a consultation seeking views from across the City of London on potential reforms to the ISA market. The upcoming Mansion House speech in July is widely anticipated as the platform for launching the consultation. <\/p>\n<\/div>\n\n

\n

Winter fuel payment U-turn<\/strong> <\/h2>\n<\/div>\n\n
\n

At the start of Prime Minister\u2019s questions last week, Keir Starmer announced a U-turn on the winter fuel payment for pensioners. He said that more pensioners will be eligible for payments, adding that the government will make decisions based on affordability. Last year, the government made the benefit means-tested, which eliminated over nine million people from the payment (of up to \u00a3300). After the changes, only pensioners with annual incomes below \u00a311,500 were eligible for the payment. The revised eligibility criteria are expected to be outlined in the Autumn Budget. Downing Street has not confirmed when the changes will be implemented.  <\/p>\n<\/div>\n\n

\n

A spokesperson for the End Fuel Poverty Coalition commented, \u201cAny U-turn is welcome, but what matters now is the detail, especially if Winter Fuel Payments are not restored to all pensioners. Any dilution of the proposals will mean fewer older people can be helped to reduce their energy use in a safe way. Pensioner fuel poverty is often hidden away behind closed doors and ultimately pensioners need warm, energy-efficient homes, not more sticking plasters.\u201d<\/em> <\/p>\n<\/div>\n\n

\n

Here to help<\/strong> <\/h2>\n<\/div>\n\n
\n

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. <\/p>\n<\/div>\n\n

\n

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.<\/strong> <\/p>\n<\/div>\n\n

\n

All details are correct at time of writing (28 May 2025)<\/em><\/strong> <\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

The CPI rate of inflation rose to 3.5% in April\u2014above forecasts\u2014driven by energy, services and air fares  The \u00a320,000 ISA limit is to remain but changes to the cash ISA component are under review  The government is expected to expand eligibility for winter fuel payments in the Autumn Budget  \u201cApril\u2019s rise in inflation was widely […]<\/p>\n","protected":false},"author":12,"featured_media":30102,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/30101"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=30101"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/30101\/revisions"}],"predecessor-version":[{"id":30104,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/30101\/revisions\/30104"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/30102"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=30101"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=30101"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=30101"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=30101"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}