British households are being hit with yet another rise in energy bills this autumn, piling more strain on budgets already battered by stubborn inflation, tax rises and weak growth.
Ofgem has confirmed that from October the typical dual-fuel direct debit bill will rise 2% to £1,755 a year. Analysts had expected half that increase. Around 20 million households will be affected, with millions more on prepayment meters also seeing higher costs.
The increase comes at a time when the UK economy looks increasingly fragile. Inflation has crept back towards 4%, food prices remain elevated, and government borrowing has surged.
Debt interest costs are chewing up more of the public finances, fuelling speculation in some quarters that the country could eventually need outside help to steady the books. Comparisons with Greece’s debt crisis a decade ago, once unthinkable for a G7 nation, are no longer confined to the fringes.
Ofgem said the price hike is largely due to government measures, including the expansion of the Warm Home Discount scheme, which will add £15 to the average annual bill while extending support to 2.7 million extra households. Ministers insist this will help the most vulnerable, but for the majority it simply means higher charges.
Energy minister Michael Shanks defended the policy, blaming Britain’s continued reliance on volatile global gas markets. He pointed to investment in renewables as the long-term solution. But that is little comfort for households already juggling mortgage repayments, rising rents and a tax burden at a postwar high.
With winter looming, bills are heading up, wages are not keeping pace, and confidence in the government’s ability to manage the economy is wearing thin.