Energy bills drive UK inflation to nine month high

UK residents are no stranger to the high cost of living, with a string of price hikes affecting budgets across the nation.

And it looks like the misery is set to continue: inflation has now risen to its highest level for nine months – and the soaring cost of energy is being blamed.

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According to the Office for National Statistics, inflation as measured by the consumer prices index stood at 2.8% last month, up from 2.7% and the highest for nine months.

The February rise was also the first in five months, with experts pointing the finger at increasingly expensive energy bills.

In addition to rocketing energy bills implemented by the UK’s major suppliers, officials also blamed the increase on the rise in petrol prices.

The rise in domestic gas and electricity bills pushed housing costs up by 0.5% between January and February, while a 4p a litre increase in the cost of petrol added 1.2% to transport prices.

The upward trend is likely to add to the growing pressure on consumer spending power, especially since wage increases stand at a meagre 1% on average.

This follows the news that UK consumers experienced a fall in their spending power yet again in February, leaving them with £10 less a month to spend on non-essential items.

This is according to Lloyds TSB Spending Power Report, which noted that UK households have witnessed substantial increases across various areas of expenditure, including food and drink (up by 3.8% year-on-year) and essential items (up by 2.6% in the month to February).

Patrick Foley, chief economist at Lloyds TSB, said: “Household budgets remain under pressure. Growth in spending on essential items remains stubbornly high despite the weakness in the economy, with food and drink spending again the largest driver of the squeeze.”

Citing mounting pressures due to the recent fall in the exchange rate, he added: “Consumer spending is therefore likely to remain weak through the first half of 2013 at least, keeping recovery in the wider economy far from assured.”

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Posted by: WarrenWilson Categories: Finance Tags: , , , Comments Off on Energy bills drive UK inflation to nine month high

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