Skip to main content

Energy prices ‘likely to maintain their upwards trend’

Inflation woes continue as gas and electricity prices keep up the cost of living.

Rising energy prices have been blamed for keeping inflation at 2.7 per cent in December for the third successive month.

Chris Crowe, an economist at Barclays Capital, told the Independent newspaper that energy prices were ‘likely to maintain their upwards trend’ with a forecast that inflation will remain above 2 per cent in the medium term.

According to The Office for National Statistics, the average gas bill rose by 5.2 per cent with a 3.9 per cent rise in average electricity costs. However, fuel costs fell by 0.2 percent and the biggest downward trend was caused by a fall in transport and airline costs.

Rising prices

All six of the UK’s largest energy firms raised its prices this winter, with E.ON’s price rise still yet to take effect. Energy prices are now at their highest levels to date, with the average energy bill costing over £1300 a year despite a promising  2.7% or £34 average price cut at the beginning of 2012.

Average household energy bills:


Old bill size

New bill size

British Gas



EDF Energy


















Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas with bill sizes averaged across all regions.

uSwitch estimates that gas and electricity price rises last year added £935 million on to UK energy bills and pushed a further 388,500 homes into fuel poverty, when a household spends 10% or more of its income on its energy bills.

Energy costs are in danger of reaching an ‘affordability ceiling’ of £1500, beyond which energy bills become unaffordable for the majority. When this happens – when, because it is predicted that energy costs will continue to rise – 6 in 10 households will be forced to go without adequate heating, while four in ten will be unable to heat their homes.

Ann Robinson, director of Consumer Policy for uSwitch, warned that ‘the health and welfare implications are huge and this has got to set government alarm bells ringing’.


  • Eduard


    Can anyone kindly give me advice on the following. British gas has an offer to fix your prices until July 2014 at a likely extra cost of £140. However, if i stay on the variable non fixed rate, I could save £10 by the end of the year if prices don’t increase. As far as BG is concerned I have to make an educated gamble and consider the problems in the Middle East etc…….