Boris Johnson promised us “a forensic and thorough going” inquiry.

For the sake of transparency and accountability, the Government’s unprecedented judicial review must fail.

If you are not angry enough already, pick up on the online  comments – Owl

For once Owl is lost for words.

Susan Davy, Chief Executive Pennon Group, is quoted as justifying the payout because: “we have delivered improvements in environmental performance, building on our sector leading 100pc water quality for our 860 miles of coastline and on track to reduce our use of storm overflows by 50pc by 2025.”

Simultaneously, she has been setting herself up as an environmental champion to lead a community response to the climate crisis, with particular reference to water supply. See what is described as her “advertorial” here: www.devonlive.com 

“….while climate change is a global issue, it has many local and community impacts, and working together with our customers and our communities holds the key to making the most difference.

“As the largest private employer and business in the region, Pennon takes its societal contribution extremely seriously….

“…We continue to invest in innovative solutions to mitigate the impacts of the drought, from repurposing ex-quarries to provide new water resources, to fixing customer-side leaks for free, launching pioneering initiatives such as Save Every Drop, and encouraging everyone to think differently about water usage…”

[Extremely seriously, how much water leaks away before it ever gets to our taps? – Owl]

South West Water pays £112m to shareholders amid sewage leak backlash

The owner of one of Britain’s biggest water companies has rewarded investors with an £112m dividend despite profits plunging and an ongoing probe into its alleged failure to report sewage leaks. 

By Oliver Gill, Chief Business Correspondent www.telegraph.co.uk 

Pennon Group, the FTSE 100 company that owns South West Water, said shareholder dividends would increase by 10.9pc.

The company highlighted that the dividend rise was 2pc higher than inflation, as measured by the Consumer Price Index including housing costs.

The 42.73p-a-share dividend amounts to £112m. It leaves Pennon with just £144m of cash reserves, compared with almost £2.7bn two years ago.

Pennon posted an £8.5m pre-tax loss on £797m of revenue for the year ending 31 March. Last year it made £128m in profit.

The results come as Pennon, which also owns Bristol Water, faces an investigation by the industry regulator examining whether its reporting of leaks and water use was accurate. 

Water companies must show that they are tackling leaks and keeping household water consumption down in accordance with rules laid down by regulator Ofwat.

David Black, the chief executive of Ofwat, said on Wednesday that a “thorough investigation will now be carried out and we will provide updates in due course on our findings and whether there is any further action Ofwat needs to take”.

Pennon responded to the investigation by saying that the figures were “subject to rigorous assurance processes” and signed off by a technical auditor.

Susan Davy, Pennon chief executive, said that the company’s annual loss followed “an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience”.

She added: “In a year in which the sector has been rightly challenged to clean up its act, we have delivered improvements in environmental performance, building on our sector leading 100pc water quality for our 860 miles of coastline and on track to reduce our use of storm overflows by 50pc by 2025. 

“I am also clear that one pollution is one too many, and numbers are falling as we implement sustained change.”

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said that high power and inflation-related costs were responsible for eroding Pennon’s profits.

He added: “But cashflows are getting squeezed by higher investment levels as the group aims to shore up its water supplies for the year. Unseasonably dry winter weather means the drought status in southwest England remains in place. 

“As summertime nears, it’s touch-and-go whether reservoir levels will be sufficient to keep customers’ supplies running at full flow. If not, Pennon could find itself in the regulator’s firing line.”

House prices are falling at their fastest rate for almost 14 years as buyers reel from the impact of sharply higher interest rates, figures showed on Thursday.

Jonathan Prynn www.standard.co.uk 

The annual rate at which prices are dropping picked up pace from 2.7 per cent in April to 3.4 per cent last month, the biggest fall since the aftermath of the financial crash in July 2009, according to lender Nationwide. Commentators said that the normal “spring bounce” seen in the London market at this time of year failed to materialise with buyers spooked by the threat of yet more interest rate pain.

The building society warned that further rate hikes from the Bank of England would “strengthen the headwinds” facing the already nervous market, although a full-scale crash is seen as unlikely. The Bank has already pushed through 12 rate increases, lifting the cost of borrowing from 0.1 per cent to 4.5 per cent since December 2021, in a bid to curb galloping inflation.

However, official figures last week showing that the Retail Price Index fell far less than expected in April to 8.7 per cent panicked City markets, which now fear the Bank will have to raise rates to as high as 5.5 per cent over the coming months.

That in turn brought turmoil to the fixed-rate mortgage market, where prices have jumped and hundreds of deals have been withdrawn.

On Thursday the average rate on a two-year deal was 5.49 per cent, up from 5.45 per cent on Wednesday, according to latest data from analysts Moneyfacts. The average five-year, fixed-rate deal rose from 5.12 per cent to 5.17 per cent, the highest since January. Meanwhile, the latest figures from the Bank of England showed the number of mortgage approvals dropping from 51,500 in March to 48,700 in April in another sign of rapidly falling confidence in the market.

Nationwide’s chief economist, Robert Gardner, said: “While consumer price inflation did slow in April, it was a much smaller decline than most analysts had expected. As a result, investors’ expectations for the future path of the bank rate increased noticeably in late May, suggesting it could peak at around 5.5 per cent, well above the 4.5 per cent peak that was priced in around late March. Furthermore, rates are also projected to remain higher for longer.

“If maintained, this is likely to exert renewed upward pressure on mortgage rates, which had been trending down after spiking in the wake of the mini-budget in September last year.”

Data from the building society also showed a month-on-month decline of 0.1 per cent in May, with the average cost of a UK home now at £260,736.

Commentators said the property market will continue to be overshadowed by heightened uncertainty over mortgages. Craig Fish, managing director at London mortgage broker Lodestone, said: “Just when you thought the market was stabilising, the inflation data emerged and triggered turmoil in the mortgage market. We were witnessing more normal levels of property activity in May, but there are now concerns about how much higher rates could go. Activity could stagnate moving forward as people take stock. We have already had some clients tell us that their property plans are on hold until things settle down.

“The hope is that as inflation drops, conditions will improve and we could see a strong end to 2023, which should continue into 2024.”

Jason Tebb, chief executive of property search website OnTheMarket.com, said: “Just as a welcome level of stability was returning to the market following the unprecedented uncertainty created by the min-budget in the autumn, something comes along to upset the apple cart.

“The inflation figures, which while moving in the right direction are proving to be more stubborn than first thought, have created volatility in the money markets, resulting in lenders increasing their mortgage pricing.”

Jonathan Hopper, chief executive of buying agents Garrington Property Finders, said: “Less than a week after the Nationwide increased its mortgage interest rates by up to 0.45 per cent, the lender’s latest House Price Index suggests the property market too has yet to settle.

“Its May data shows that average property prices fell in eight out of the past nine months, and prices are now four per cent lower than their peak of August 2022. For now, April’s fleeting price increase looks like a blip rather than the start of a rapid recovery.”

Samuel Mather-Holgate, from advisory firm Mather & Murray Financial, said: “Approvals for house purchases were down in April, and following the events of the past week, with lenders on red alert, activity in the housing market is set to dry up again, as confidence goes from boom to bust.”