Business news live: Government faces Cash ISA criticism, house price growth slows

The Premium Bonds rate has been cut once more, with the prize rate down to 3.6 per cent from August.

Is it still worthwhile having your money in NS&I’s flagship product?

Albert Toth runs the numbers:

Rachel Reeves is set to announce plans to cut the annual allowance for Cash ISAs in a push to encourage people to invest more.

It is expected the chancellor will unveil the measure in her Mansion House speech, which takes place on July 15.

The Financial Times cited government officials confirming the chancellor would lower the allowance, in what will be the first major alteration of ISA limits since 2017-18. Officials added that talks over the final figure were still ongoing.

Here’s all you need to know:

The number of entry level jobs comprised of junior positions, graduate roles and apprenticeships has fallen by almost a third (31.9 per cent) since the arrival of ChatGPT, research shows.

Job search site Adzuna found that vacancies looking for graduates had fallen to the lowest level since Covid, with entry level jobs now only accounting for a quarter of the total market, down from 28.9 per cent in 2022.

While replacing entry-level roles with artificial intelligence taking on tasks is part of the picture, rising labour costs – including increased National Insurance contributions – are also a factor, with rising salaries outstripping inflation until recently.

ChatGPT launched in November 2022, releasing several versions since then and starting what has been a new era of technological transformation. The company which owns it is now worth $300bn (£219bn), making it bigger than any public listed company on the London Stock Exchange.

Today’s news Ofgem are raising bills will affect consumers – but big businesses, too, as Dan Coatsworth, investment analyst at AJ Bell, explains.

“Utility companies are in a constant battle with regulators over five-year pricing controls. These companies spend a considerable amount of money on upgrading infrastructure and they expect to be able to make a decent return on that investment. There is often a mismatch between what the regulator allows them to charge and what the utilities believe is fair.

“SSE is not happy with the current proposal from Ofgem regarding the next electricity pricing cycle. The utility doesn’t see eye to eye on the draft regulations, saying it doesn’t factor in true costs and implies it won’t result in adequate cash flow for the business.

“It’s perfectly normal for utilities to fight their corner until the eleventh hour. National Grid has issued a tamer response compared to SSE but is still pushing for better incentives.

“Investors seem encouraged by SSE and National Grid standing their ground and demanding more, given the share price rise in both companies on the news.”

Sainsbury’s is celebrating the highest share of the market it has held in nearly a decade.

The supermarket says it has grown its share for three years in a row and is now the highest since 2016.

Profit is expected to remain flat at around £1bn, with higher sales offset by lower profitability and price cuts.

Shares rose slightly after trading opened but are flat again now.

More now on house price growth data – and one industry expert suggests that a further lowering of prices is the only way forward at this point, with sellers tired of long wait times amid a “recalibration” of the market.

“The post-Stamp Duty lull in demand has collided with a deluge of supply,” Jonathan Hopper, CEO of Garrington Property Finders, said.

“In some areas, the flood of supply seems almost biblical. Estate agents are seeing a wave of new instructions that includes properties re-entering the market that were withdrawn from sale during last year’s uncertainty, as well as the traditional summer surge.

“This is not primarily a market correction prompted by falling demand, but one triggered by an inescapable imbalance: too many sellers, not enough serious buyers.

“On the ground, we are witnessing a clear behavioural shift. Many sellers are not financially distressed, but they are fatigued – tired of waiting for perfect conditions, and now motivated to act.

“In this environment, token price reductions of £5,000 to £10,000 just won’t cut it. The properties that are selling are those where sellers have responded with decisive, meaningful price adjustments, and their reductions are now showing up in the national data.

“If this trajectory continues, as we expect it will, the summer months may bring a series of increasingly visible price softening moments, driven not by panic, but by pragmatism.

“Sellers are being forced to adapt to a new normal, and the market data is beginning to reflect this sharp recalibration.”

Asian stocks fell overnight despite a positive session in the US.

The S&P 500 closed 0.52 per cent up and the Nasdaq was 0.47 per cent up – but in Asia, the Nikkei 225, the Hang Seng and the Asia Dow were all down.

Japan’s index was hardest hit, -1.24 per cent at the close.

This morning however, the FTSE 100 is on the rise with British companies up 0.23 per cent in early trading.

Germany and France’s benchmarks are both flat.

Rachel Reeves is set to announce cuts to the Cash ISA next month in her Mansion House speech next month.

There is no clarification yet on what the cuts will be, but previously there had been suggestion the limits could be brought down from £20,000 to £4,000.

To be clear, that’s the Cash ISA limit – not the overall allowance, which would remain at £20k.

It is likely to be part of a wider ISA refresh, aimed at getting more people investing. Industry experts have largely dismissed the idea that a Cash ISA cut would result in savers turning towards the stock market and say further education and guidance is needed.

House prices are still on the up, but were doing so at a much slower rate in June compared to last year, Nationwide data shows.

House price growth was still rising at 3.5 per cent annually in May, but in June that dropped to 2.1 per cent.

The average house price was £271,619 and the area of England with highest growth was the north, at more than 5 per cent, while East Anglia grew at barely above 1 per cent.

“The softening in price growth may reflect weaker demand following the increase in stamp duty at the start of April. Nevertheless, we still expect activity to pick up as the summer progresses, despite ongoing economic uncertainties in the global economy, since underlying conditions for potential homebuyers in the UK remain supportive,” said Robert Gardner, Nationwide’s chief economist.

“The unemployment rate remains low, earnings are rising at a healthy pace in real terms (i.e. after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we and most other analysts expect.”

People living in flats and rented homes could get the chance to install “plug-in” solar panels on roofs and balconies under Government plans.

The move forms part of the solar road-map set out by the Government to rapidly speed up the rollout of solar power across the UK as part of its efforts to shift the country to clean electricity by 2030.

Ministers said households could save around £500 a year on their bills by installing rooftop solar panels, which could also boost jobs and improve energy security.