Your commercial news round-up: British Gas, US tariffs, inflation, steel works

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In this week’s commercial news round-up, we examine British Gas’ reported earnings and the Federal Reserve’s concerns regarding President Donald Trump’s proposed tariffs. Meanwhile, UK inflation has hit a 10-month high and unions are calling for investment into steel works to aid the transition to cleaner energy. Read on to find out more!

• British Gas owner Centrica has reported a slump in earnings, with profits down to £2.3 billion – one-third less than the £3.5 billion in 2023, which included a £500 million windfall from the energy regulator. In 2023, Ofgem allowed all energy suppliers to adjust their price caps to recover from unexpected energy costs, which benefitted British Gas. The energy provider saw a decline in operating profit in 2024. However, Centrica explained that performance was “relatively comparable” when excluding the impact that the one-off Ofgem allowance had on 2023 figures. Although British Gas maintained a large customer base, it was overtaken by Octopus Energy as Britain’s biggest energy supplier, a title British Gas held for nearly four decades since its privatisation under former Prime Minister Margaret Thatcher.
   
• In the US, the Federal Reserve has expressed concerns that President Donald Trump’s proposed tariffs could drive up prices. Minutes from a recent meeting revealed the committee’s concerns: “Business contacts in a number of districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs.” Trump recently criticised the Federal Reserve for holding interest rates in January. Chair Jerome Powell stated that the bank isn’t “in a hurry” to cut rates due to the current economic uncertainty. Analysts predict there’ll be either one rate cut in 2025 or none at all.
   
• Meanwhile, UK inflation has also reached a 10-month high, up from 2.8% in December to 3% in January, surpassing the 2.5% forecasted by economists polled by Reuters. The Office for National Statistics attributed the rise to airfares dropping less than usual in January, higher costs for private schools after the new VAT on fees and increased costs for food and non-alcoholic drinks. Services inflation rose from 4.4% in December to 5% in January, while core inflation, which excludes energy, food, alcohol and tobacco, climbed from 3.2% to 3.7%. Economist at the consultancy Capital Economics, Ruth Gregory, said: “We doubt this will prevent the Bank of England from cutting interest rates further, but it will mean it continues to cut rates only slowly.”
   
• Unions have called for a £200 million investment to keep two Scunthorpe steel furnaces running until electric replacements are built. Chinese-owned British Steel is transitioning to electric arc furnaces for cleaner, recycled steel. However, unions fear that rapidly closing furnaces could lead to nearly 2,000 job losses. A report from Syndex, a consultancy commissioned by the Community trade union, outlined that this number of job losses would have “severe socioeconomic consequences” for Lincolnshire. The union’s General Secretary Roy Rickhuss explained that its proposals are a “roadmap towards a just transition for British Steel” without a “destructive cliff-edge”. A British Steel spokesperson said it’s in “active discussions with the UK government” and noted that “our trade union partners will be an important part of that future, and we welcome their contribution to the debate in the Syndex report”.

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