SSE-backed wind farm fined record £33m for pushing up household bills

The wind farm is operated by SSE on behalf of a consortium
The wind farm is operated by SSE on behalf of a consortium - Andrew Milligan/PA

A wind farm owned by energy giant SSE is to pay a record fine to the energy regulator after overcharging customers.

Ofgem said on Tuesday that the Beatrice wind farm, located off the Scottish coast, had agreed to make a payment of £33m after breaching part of its licence conditions.

The operator breached one of its licence rules by charging excessive prices to cut its power output when needed to prevent the national grid being overloaded. This, in turn, pushed up costs for consumers such as households and businesses, Ofgem said.

Beatrice is one of Scotland’s largest offshore wind farms, with 84 turbines located around 8 miles off the Caithness coast. Its turbines are capable of producing energy for up to 450,000 homes.


The wind farm is operated by SSE on behalf of a consortium, Beatrice Offshore Windfarm Limited (Bowl), of which SSE owns 40pc.

Bowl admitted to the breach, describing the issue as “wholly unintentional”.

Ofgem has been investigating power generators for alleged market manipulation after they were accused of overcharging consumers.

Wind farms are paid to switch off during times of low demand and high output to stop the electricity grid being overwhelmed.

Ofgem was handed a dossier gathered by analysts at the Renewable Energy Foundation (REF), which suggested wind farm companies could be boosting the price of “virtual energy” they never actually generated.

The fine for Bowl is the fifth, and largest, handed out by Ofgem for this kind of abuse. The previous record was £23m, which was levied against a power company owned by Czech billionaire Daniel Kretinsky last October.

Ofgem said in a statement: “Ofgem has been clear that electricity generators must put in place controls to ensure that their prices are set in a way that ensures that they do not obtain excessive benefits during the periods where they are required to reduce output due to the limitations of the transmission network.

“If they fail to do so, they should expect to face large penalties.”

Bowl has agreed to make the £33.14m payment to Ofgem’s redress fund, which supports vulnerable people with their energy needs.

A spokesman for Bowl said: “Beatrice Offshore Windfarm Limited accepts that it breached one of its electricity generation licence conditions. The breach was in Bowl’s view wholly unintentional.

“Bowl will make a payment to the Ofgem consumer redress fund, has reviewed its bid pricing policy and fully cooperated with Ofgem throughout to conclude this process.

“With other industry participants, Bowl is engaging on proposed modifications to the relevant industry code and Ofgem’s ongoing consultation on its approach to interpreting and enforcing the transmission constraint licence condition.”

Read the latest updates below.

08:11 PM BST

Signing off...

Thanks for joining us today. We’ll be back on the Markets blog tomorrow morning to cover the latest from the markets from around 7am.

08:07 PM BST

FTX lieutenant jailed for seven and a half years

A key lieutenant to Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, was sentenced to seven and a half years in jail on Tuesday.

Ryan Salame, a former chief executive of FTX’s Bahamian subsidiary, pleaded guilty to making tens of millions of dollars in unlawful political campaign donations to boost causes supported by his boss. His prison sentence was longer than the five to seven years sought by prosecutors.

Salame’s lawyers had tried to distance him from the FTX fraud. “He was duped, as was everyone else, into believing that the companies were legitimate, solvent and wildly profitable,” they said in a filing before the sentencing.

In addition to the prison term, Salame, 30, was sentenced to three years of supervised release and ordered to pay more than $11m (£8.6m).

05:15 PM BST

Nasdaq hits 17,000 amid AI boom

The Nasdaq hit an all-time record on Tuesday afternoon, after breaching the symbolically important 17,000 level for the first time, buoyed as AI darling Nvidia also jumped to a record high.

Nvidia’s gains - of nearly 6pc today - lifted its fellow chip stocks. The Philadelphia Semiconductor Index of 30 leading US chip companies rose 1.8pc after traders returned from a holiday weekend.

The rise in AI stocks came even as focus shifted to key inflation data later in the week that could sway expectations for the Federal Reserve’s plans for interest rates.

The possibility that the world’s most influential central bank could kick off rate cuts this year has sent Wall Street on a record-breaking rally since late 2023, with the Nasdaq and S&P 500 marking their fifth straight week of gains on Friday.

However, expectations for the timing of rate cuts have see-sawed, with policymakers wary as the data still reflects sticky inflation.

Market attention is on the US core Personal Consumption Expenditures Price Index report for April, which will be released later in the week. The Fed’s preferred inflation barometer is expected to hold steady on a monthly basis.

Peter Andersen, founder of Andersen Capital Management, said:

There has been an emerging acceptance by the investment community that it is unlikely that the Fed will lower rates in 2024.

As we anticipate the next economic data, investors will be looking to see if those results will reinforce the changing opinion that there will be no rate cuts this year.

04:56 PM BST

Footsie closes down

The FTSE 100 closed down 0.7pc. The top riser was OCado, up 9.8pc, followed by JD Sports, up 5.4pc. The biggest faller was betting group Flutter, down 7.4pc, followed by rival Entain, down 4.7pc.

Meanwhile, the FTSE 250 fell 0.2pc. The top riser was Octopus Renewables Infrastructure Trust, up 6.5pc, followed by Carex owner PZ Cussons, up 5.6pc. The biggest faller was railway food retailer SSP, down 5pc, followed by miner Ferrexpo, down 5pc.

04:41 PM BST

Adam Neumann abandons attempt to buy WeWork

Adam Neumann has abandoned his attempt to regain control of WeWork, the bankrupt office company he founded, five years after he was ousted.

He told The New York Times:

For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive.

Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.

Mr Newmann’s property company Flow had been leading a consortium of bidders attempting to buy WeWork, which filed for bankruptcy protection in November saying it could not afford to keep paying for hundreds of office leases.

WeWork and Flow have been approached for comment.

Adam Neumann, co-founder of WeWork, speaks in Shanghai, 2018
Adam Neumann, co-founder of WeWork, speaks in Shanghai, 2018 - Jackal Pan/Visual China Group via Getty Images

04:23 PM BST

Consumer confidence returns to growth in the US

Consumer confidence in the US rose in May after three straight months of declines, though Americans are still anxious about inflation and interest rates.

The Conference Board, a business research group, said its consumer confidence index rose in May to 102 from 97.5 in April. Analysts were expecting the index to decline again.

The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

04:10 PM BST

New PwC chief promotes election losers in board reshuffle

PwC UK’s new boss has promoted the losers of its latest leadership election in a boardroom reshuffle. Our reporter Adam Mawardi has the details:

Marco Amitrano, the senior partner-elect of PwC’s UK and Middle East operations, handed new roles to his defeated rivals weeks before officially taking charge of the “big four” auditor.

Tax head Laura Hinton will become PwC UK’s new managing partner under the changes, while audit boss Hemione Hudson will serve as chief network officer and sit on the firm’s global leadership team.

Ms Hudson’s role will include maximising coordination across PwC, which operates as a global network of independent member firms.

The former frontrunners were already part of PwC UK’s management board under outgoing boss Kevin Ellis, who steps down next month after eight years at the helm.

The new management board does not include Marrisa Thomas, PwC UK’s chief operating officer who emerged as an early favourite to win the senior partner title.

Mr Amitrano’s new board scraps the standalone chief operating officer position altogether, leaving newly appointed chief financial and administrative officer, Simon Hunt, to take on these responsibilities.

The announcement comes after PwC’s UK and Middle East partners last month elected Mr Amitrano, previously managing partner and head of clients and markets, as the firm’s new leader.

04:04 PM BST

Boohoo scraps executive bonus plan after shareholder backlash

Boohoo has abandoned plans to hand out £1m bonuses to its senior bosses after a shareholder backlash against the pay proposals. Hannah Boland reports:

The fast fashion retailer said it would no longer be providing pay bumps to its executive directors who had missed their performance targets as Boohoo plunged to a £160m loss.

The company said it had “engaged with certain shareholders” over the past week, meaning it no longer would be ignoring its bonus criteria to pay £1m bonuses to Mahmud Kamani, its chairman and co-founder; John Lyttle, the chief executive; and Carol Kane, the executive director.

Under the criteria, all three should receive no annual bonuses. It said the decision to implement that policy meant Mr Kamani’s total pay package had halved this year to £502,973. Ms Kane’s is falling by 52pc to £523,904 and Mr Lyttle’s by the same percentage to £713,175.

It follows criticism of the retailer over the weekend, with several investors reportedly planning to stage a revolt at Boohoo’s annual general meeting next month. One top-five shareholder told The Times on Monday that they were “furious” about the bonuses, which came after a 17pc sales slump at Boohoo.

Earlier this month, the retailer revealed that its losses widened over the year to the end of February to £160m compared with £91m a year earlier.

It said fewer customers were visiting its website and bought less when they did decide to shop. Boohoo has been facing mounting competition from Shein over the past year.

The latest push-back on its executive payouts came as Boohoo had also been planning to get shareholder approval to shake up its long-term bonus scheme. The proposal, which would have merged its annual bonuses with its long-term scheme, would have meant its top executives could get bonuses worth as much as 500pc of their salaries, equal to around £2.5m.

Boohoo said on Tuesday that it had also decided not to implement this bonus plan at this time following discussions with shareholders.

Fewer customers have been visiting the Boohoo website
Fewer customers have been visiting the Boohoo website - Dado Ruvic/Reuters

03:21 PM BST

Ozempic-maker responsible for half of all new private sector jobs created in Denmark over last year

Ozempic and Wegovy maker Novo Nordisk has been responsible for half of all private sector jobs created outside of the agricultural industry in Denmark since the beginning of 2023, official data has shown. Hannah Boland reports:

Novo Nordisk has created more than 7,500 direct jobs in the country since the start of last year, Denmark’s Economic Council said.

It said this accounted for one fifth of the total employment growth and around a quarter of private sector jobs growth, excluding agriculture.

Novo Nordisk also helped to create another 7,500 roles indirectly since the start of 2023, the report found, with industries such as construction boosted by its need to build vast production facilities as it ramps up manufacturing.

It comes after the Danish government said GDP will grow by 2.7pc this year, up from 1.4pc it had expected in December.

The Economic Council said the large GDP contribution from the pharmaceutical industry has led to greater employment growth than expected.

It has fuelled concerns that Denmark is becoming increasingly reliant on Novo Nordisk for growth.

The company was credited with saving Denmark from recession in 2023. Without Novo Nordisk, the Danish economy would have contracted slightly. The economy is expected to grow 2.6pc this year.

Despite this, Denmark last month placed restrictions on its Novo Nordisk’s drugs being used for obesity, requiring patients to go onto cheaper products amid price concerns.

Boxes of Wegovy made by Novo Nordisk
Boxes of Wegovy made by Novo Nordisk - Hollie Adams/Reuters

03:13 PM BST

House prices will only rise 3pc this year, say economists

Later interest rate cuts will dampen house price rises, a firm of leading economists has said.

Pantheon Macroeconomics says that it has revised down its expectation for rises in house prices because markets are betting on fewer rate cuts now than a month ago. The economists therefore expect the official Bank rate to be 4.75pc at the end of the year, as opposed to 4.5pc before. They say:

We now expect the official measure of house prices to rise 3pc year-over-year in Q4 2024, and 4.0pc in Q4 2025. Previously we expected a 4.0pc gain in Q4 2024 and 2025.

02:27 PM BST

Toyota bets on new petrol engines over electric

Toyota is to develop new petrol-powered internal combustion engines that could be refitted to burn cleaner fuels such as hydrogen, Matt Oliver reports.

In a joint press conference with Mazda and Subaru, the Japanese company on Tuesday unveiled prototype engines that it said would be smaller, more efficient and capable of burning eco-friendly fuels such as hydrogen.

It said the engine is designed to be used in tandem with a battery-powered electric motor and is expected to be deployed in future hybrid and plug-in cars.

Koji Sato, Toyota’s chief executive, said the decision underlined Toyota’s plan to cultivate “diverse options to ensure reductions in CO2 emissions”.

Under its “multipathway” strategy, the company has been slower than some rivals to embrace electric vehicles (EVs) and has stressed the need for alternatives to be considered as well, such as hybrids, hydrogen fuel cell cars, synthetic fuels and other low-carbon technologies.

Akio Toyoda, the car maker’s chairman, in January warned “the enemy is CO2” and that EVs were unlikely to ever capture more than one third of the global market due to infrastructure constraints.

On Tuesday, chief executive Mr Sato echoed those comments, saying: “To become carbon neutral, what’s most important is to reduce emissions.

“What we need is an engine that can efficiently use various types of fuel.

“The engine can’t survive in its current form. It needs to change.”

01:50 PM BST

Germany faces years of economic stagnation as baby boomers retire, warns IMF

Germany is staring down the barrel of years of economic torpor as it grapples with a shrinking workforce, according to the International MOnetary Fund.

The growth of Germany’s working age population will fall by 0.7pc “in the medium term” as baby boomers retire and immigration levels decline. Eir Nolsøe has more:

Carsten Brzeski, an economist at ING, said the bleak figures marked the start of “the Japanification of Germany”.

Mr Brzeski said: “Before the pandemic, potential growth in Germany was estimated at around 1.5pc. So this shows you the big impacts demographics are having.”

The IMF said that public finances would suffer from having a much older population, with tax receipts growing at a slower pace and spending on healthcare and pensions rising.

Mr Brzeski added: “Except for Japan, we simply don’t have any other example of any developed economy of what this demographic change will do. We look at the headline numbers, we see growth coming down [and] stagnation, but we have no clue what this will mean for societies.”

01:36 PM BST

Election news driving ‘short-term volatility’

Rishi Sunak’s general election announcement and sudden rush of policy proposals is driving volatility on the FTSE 100, according to City analysts.

“Last week’s election announcement is causing some short-term volatility in the markets, but longer-term investors can usually take this as background noise,” said Guy Lawson-Johns, equity analyst at Hargreaves Lansdown.

12:52 PM BST

Water company shares drive FTSE falls

Shares in UK-listed water companies dropped on Tuesday with the FTSE 100 on track for its worst losing streak in nine months.

The stock of FTSE 100 group United Utilities and other listed utility businesses including FTSE 250 firm Pennon and Severn Trent all dropped by more than 3pc amid an ongoing crisis in the sector.

The Guardian reported on Tuesday that Ofwat, the water regulator, was planning to reject most water companies’ requests to increase bills. The water industry has been lobbying to increase water prices to fund modernisation and repairs.

The FTSE 100 was down 0.3pc as of midday, its longest streak of daily declines since August last year.

Bucking the trend was Ocado, whose shares climbed more than 8pc as markets reopened after the Bank Holiday.

12:11 PM BST

Rachel Reeves insists “no additional tax rises” under Labour

Shadow chancellor Rachel Reeves has ruled out any surprise tax hikes as she set out Labour’s financial plans ahead of July’s General Election.

Speaking at an event in Derby this morning, Ms Reeves said Labour had already confirmed several planned new taxes. She previously ruled out an increase of national insurance or income tax.

She said: “There are no additional tax rises needed beyond the ones that I’ve said.”

Labour has previously stated it would extend a windfall levy on energy giants, charge VAT on private school fees and change taxes on private equity bonuses.

11:46 AM BST

NatWest mobile app back online

NatWest’s status page now says its mobile app is working normally after complaints from customers this morning.

11:40 AM BST

Retail sales recover as inflation eases

UK retail sales grew at their fastest pace since 2022 in May as inflationary pressures on shoppers eased.

The CBI’s Distributive Trades Survey found sales increased at their fastest pace since December 2022, although retailers predicted a dip to follow in June.

Overall, +8pc of retailers reported sales volumes were up compared to the previous year, a marked improvement from -44pc in April.

“Sales in May were seen as ‘average’ for the time of year,” the CBI said, “which was the firmest outturn in eight months. Retailers expect sales to remain broadly in line with seasonal norms in June.”

It added: “Selling price inflation eased considerably in the year to May, now at its lowest since August 2020, and falling back below its long-run average. Prices are expected to continue to increase at only a slightly faster pace next month.”

11:09 AM BST

Fund manager Nick Train apologises for “sustained poor performance”

Stock picker Nick Train has apologised to investors and acknowledged their “impatience” over increasingly lacklustre returns in recent years.

Reporting six-month results for the Finsbury Growth & Income Trust, Mr Train acknowledged the fund had underperformed against its benchmark - the total return on the FTSE all-share index.

Mr Train said he remained “optimistic” about many of the fund’s holdings, despite its poor returns, but admitted a lack of exposure to fossil fuel companies and limited technology holdings had held back its growth.

The fund manager said: “The portfolio in 2020 did not have enough exposure to technology or companies well-positioned to exploit technology. It had some, but evidently not enough.”

He added he was “frustrated by the malaise gripping the UK equity market. A malaise which is, in my opinion, only partly justified.”

He said he had lately sought to capitalise on stocks with potential to enjoy a boost from the digital economy, including credit scoring company Experian and online estate agent Rightmove.

10:43 AM BST

Online banking ‘working normally’ but mobile app problems persist

NatWest’s online banking services have returned to normal, however problems are still plaguing customers trying to use its mobile app this morning.

On the bank’s service updates page, NatWest says its website and online banking services have returned to normal. Its mobile app, however, is still suffering issues.

The status page now says: “Some customers aren’t currently able to view their credit card information on our mobile app. We’re working hard to fix this, sorry if it’s causing you any issues. You can still make a payment to your credit card using our mobile app.”

10:14 AM BST

NatWest online banking ‘should now be working’

NatWest has told customers its mobile app and online banking services “should now be working as expected” after a major outage this morning.

While some customers have continued to complain to the bank on social media, NatWest has told affected individuals to “try logging in as normal”.

Some customers on social media claimed NatWest’s banking app had been out of action since 3am this morning.

However, NatWest’s “service updates” page still displays “service disruption” with its mobile and online banking tools and says “customer support wait times may be longer than usual”.

09:23 AM BST

NatWest has closed more than half of branches in last decade

NatWest is urging customers to visit a branch or use telephone banking as their online banking goes down, but for many, that is not an option available to them.

According to research from Nationwide, NatWest closed 67pc of its branches between 2013 and 2023, with total numbers falling from 1,391 to 458. Barclays, HSBC and Virgin Money had closed more as a percentage.

NatWest said last year it would close at least 172 branches in 2023 and 2024.

08:35 AM BST

NatWest apologises after online banking goes down

NatWest has apologised to customers after they were unable to access the bank’s app and website.

Customers complained on Tuesday morning that they had been unable to log in to their bank accounts on the company’s smartphone app.

A support page said there was a service disruption with both its app and website, and advised customers to use its telephone banking service or visit a branch.

08:20 AM BST

FTSE 100 slightly up in early trading

The FTSE is slightly up in early trading, at 8,331.19 against last Friday’s close of 8,317.59, but markets are off to a generally slow start to the week after the Bank Holiday.

Mining group Fresnillo is leading the FTSE, up 3pc, while the housebuilder Persimmon is the biggest loser, down 1.2pc.

It’s a generally subdued start to the day around Europe after US markets were also closed yesterday. The European Stoxx 50 is up 0.2pc while Germany’s DAX is up 0.3pc.

Bulls will be hoping the FTSE can avoid a fifth straight day of losses.

Markets will be looking out for the European Central Bank’s inflation expectations data at 9am UK time.

07:49 AM BST

Revolution Bars says bid offer from rival is ‘incapable of being delivered’

Revolution Bars, the struggling bar group, has shot down a potential takeover offer from rival group Nightcap, as “incapable of being delivered”.

In a stock market update this morning, Revolution said it had held a series of discussions with Nightcap, which owns brands such as Barrio and Dirty Martini, but that there were a “number of challenges” meaning the takeover is “incapable of being delivered”.

It would require Nightcap to carry out two separate equity fundings, meaning that Revolution would have to raise existing funds to bridge the gap until the deal could be complete. Revolution said it had received an offer on May 17 but it was turned down.

It has asked shareholders to approve a £12.5m fundraising which it says will allow it to see through a restructuring plan.

Revolution Bars bartender
Revolution Bars bartender

07:30 AM BST

Workers braced for downturn in pay rises

Despite food prices rising, there are more signs that inflation is on a broader downward trend, with pay data this morning suggesting that workers will get smaller pay rises in the coming months.

Here’s Tim Wallace with the update:

Workers are braced for a sharp slowdown in pay rises, in a sign that inflation is fading from the economy, potentially allowing officials at the Bank of England to cut interest rates.

The average employee expects a 3.8pc pay rise in the coming year, according to a survey by recruitment company Robert Half and the Centre for Economics and Business Research.

That is well below the 6pc average annual increase in the past year, as shown by figures from the Office for National Statistics in the first quarter of 2024.

It suggests a sharp slowdown in pay growth is on the way, which is encouraging for Andrew Bailey, the Bank of England’s Governor, as he seeks signs that the frenzy of price rises and pay increases which followed the pandemic is coming to an end.

Matt Weston at Robert Half said that although workers are still feeling the pinch from the cost of living crisis, they are also aware that the skills shortage has eased, meaning employers are no longer typically offering huge pay rises to attract and retain talent.

“Workers are feeling the pinch, hence the large number hoping for pay rises. However, the uncertainty of the market at the moment means that many are taking a more realistic approach,” he said.

“Many workers are also clearly opting for safety and security over jumping ship for better pay. This ‘Great Stay’ that we’re seeing in the workforce at the moment is further evidence that people are reluctant to move jobs in the current climate.”

07:19 AM BST

Food prices rise after jump in sugar costs

Good morning

High sugar costs are pushing up the price of sweets and chocolate,according to the British Retail Consortium, keeping food inflation stubbornly high.

5 things to start your day

1) Business faces £42bn debt crisis after end of ultra-low rates | Surge in borrowing costs expected to harm economy for years to come

2) Labour’s dirty money crackdown ‘will drive away legitimate wealth creators’ | Lawyers warn of privacy concerns over expansion of rules governing trusts

3) Titanic shipbuilder warns Scottish yards and 500 jobs are at risk | Harland & Wolff races to secure taxpayer backing for £200m loan

4) Taxpayer rail subsidies are ‘unsustainable’, say MPs | Subsidies have not fallen back to pre-Covid levels, despite the end of lockdown and the return to the office

5) Young British workers ‘game the system’ to take more sick days than migrant staff | UK workers appear far more likely to take time off than employees born abroad

What happened overnight

Asian shares held a mixed tone on Tuesday after rallying the previous session, as rising bets of an imminent European rate cut helped risk appetite ahead of some key inflation data.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4pc, thanks to a 0.7pc gain in Hong Kong’s Hang Seng index, after climbing 0.9pc on Monday.

Japan’s Nikkei, meanwhile, slipped 0.3pc, reversing some of the 0.7pc advance a day ago.

Wall Street stock futures firmed up ahead of the reopening of US markets after a bank holiday. S&P 500 futures rose 0.1pc and Nasdaq futures gained 0.2pc before a line-up of Federal Reserve speakers later in the day for the latest guidance on rate outlook.