Inflation is expected to rise by 2.8% as the cost of both energy bills and fuel continues to rise.
The news comes among speculation that this week’s Budget will see the Bank of England overhauled.
Energy bills increased by an average of £94 or 7.4%, taking the average household energy bill to a record high of £1,353 a year amidst concerns about the growing ranks of consumers rationing their energy use in an attempt to stave off costs.
Ann Robinson, Director of Consumer Policy at uSwitch called the news a ‘double whammy’ for consumers hit by higher household bills and inflation:
“These figures will serve to cast the spotlight on Britain’s big six energy suppliers again because, as we can now see, the impact of higher energy costs doesn’t just end on bills.
“Consumers are calling to the Chancellor for help, looking to tomorrow’s Budget to tackle the issues that matter to them – specifically the cost of utility bills and petrol prices.
“Essential household bills have increased by 25% in the last five years, while wages have climbed by just 6% in the same timeframe. Relentless bill hikes are placing unprecedented pressure on consumers who are now more worried about rising living costs than their health.
Pressure to act
“85% believe that the Chancellor does not understand the financial fears of ordinary people and 71% say that their financial situation has worsened since the Coalition came to power in 2010. While all eyes will be on the Chancellor as he delivers the Budget, the energy industry has its role to play too. I would urge suppliers to take note of the pressure that consumers are coming under and to cut their prices at the earliest opportunity.
“However, consumers should help themselves too. There are two steps that everyone should now take to protect themselves from the high cost of energy – use less energy by making homes more energy efficient and pay less for what you do use by moving to a more competitive plan.”
“Secondly, now more than ever is the time to take energy efficiency and home insulation seriously.”
Meanwhile, Ofgem has warned that energy suppliers look set to make record profits in the UK with total profits rising from £30 per household to £110. However, energy suppliers dispute these figures, saying they don’t reflect actual profits.
Recent research from uSwitch has shown that the average cost of household bills has risen by 25 per cent in the last five years, while salaries rose by just 6 per cent.
How is Ofgem says its going to shake up the energy market – in your favour.