Thames Water hit hardest as regulators force the sector to return £114 million to customers

Thames Water has been hit hardest as industry regulators force utility firms to return £114 million in total to customers next year.

The rebate will come in the form of lower bills and follows an assessment at Ofwat of targets for water companies for 2022/23.

The watchdog found that the performance of London’s water provider was “lagging behind” its targets. It will take the hardest financial hit.

David Black, Ofwat CEO said: “The targets we set for companies were designed to be stretching – to drive improvements for customers and the environment. However, our latest report shows they are falling short, leading to £114m being returned to customers through bill reductions. While that may be welcome to billpayers, it is very disappointing news for all who want to see the sector do better.”

Thames Water has 11 million customers in the capital and around the south east and is the biggest supplier in the country.

Six other companies were put by Oftwat in the “lagging” category: Anglian Water, Dŵr Cymru, Southern Water, , Yorkshire Water, Bristol Water and South East Water.

ASOS profits at bottom of expected range as wet summer weather hits sales

ASOS said profits are likely to come in at the bottom of its expected range, after the wet summer weather contributed to a 15% sales decline at the fast fashion brand.

The business had already anticipated a sales decline as it attempts to restore margins following a tough start to 2023, but it said the wet weather led to “a deterioration in the UK clothing market”.

The group now expects profit for the year to be at the bottom of its £40 million to £60 million range. It has taken a number of steps to improve future profitability, with its profit per order now 35% higher thanks to steps to “improve the behaviour of our least profitable customers”, who tend to use buy-now-pay-later services and return clothes at high rates.

The bottom-of-guidance profits may be cheered by short sellers, who have made ASOS by far the City’s most bet-against stock in recent months.

Poor run for Asia markets continues, sterling and Brent Crude lower

US markets closed in positive territory for the first time in five sessions yesterday, led by a rise of 0.45% for the technology-based Nasdaq Composite.

The improvement came despite the 10 year US Treasury yield ending the day at a post-2007 high of 4.53% as traders reacted to last week’s message from the Federal Reserve that interest rates are likely to stay in restrictive territory.

The FTSE 100 index yesterday fell 0.8%, driven by a combination of rising bond yields and weakness for mining stocks after China’s Evergrande said its debt restructuring plan had run into difficulty.

CMC Markets today expects London’s top flight to open broadly unchanged at 7622 after Asia markets failed to benefit from the stronger Wall Street session.

Hong Kong’s Hang Seng index is down another 0.9% today and on course close at its lowest level since November.

Meanwhile, the strengthening of the dollar has continued to leave the pound below $1.22 at its lowest level since March. Brent Crude stood at $92.50, a decline of 0.8% on fears that high interest rates will curb economic demand.

Recap: Yesterday’s top stories

Good morning. Here’s a summary of our top headlines from yesterday: