Money News: Darkness at the end of the tunnel: more energy price rises

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The Independent Online

More fuel bill misery looms after British Gas and EDF Energy announced they were to hike the cost of bills for millions of customers.

Blaming the high cost of wholesale gas prices, British Gas has hit customers hardest. From 1 March they will see price rises of 22 per cent for both their gas and electricity bills.

From 13 March, EDF - which pumps energy to customers of Sweb, Seeboard Energy and London Energy - will raise prices for gas by 14.7 per cent and electricity by 4.7 per cent. It stressed that, since January 2005, the price of wholesale gas had doubled, while wholesale electricity had leapt by 90 per cent.

The hikes come just days after Scottish Power revealed its own rises: 15 per cent for gas, 8 per cent for electricity.

Derek Lickorish, EDF's chief operating officer, said his firm had been forced to raise prices but added that it had launched a new, limited-availability fixed-price tariff.

Energywatch, the consumer watchdog, expressed concern that the first two months of 2006 had brought "unprecedented and almost unbearable pressure" to bear on the fight against "fuel poverty", defined as a situation in which at least 10 per cent of a household's income is spent on energy bills.

"Prices are being continually pushed up and it won't be long before we see £1,000 energy bills as the norm," said Adam Scorer, director of campaigns at Energywatch. "We are faced with a doubling of the number of households in fuel poverty, which face the daily decision [of whether] to eat or heat.

"We're at risk of returning to levels of fuel poverty not seen since the close of the 1990s."

Current accounts: Barclays offer steps up the war

Another shot has been fired in the long-running bank battle for a share of the current account market.

Barclays has launched a regular savings account paying 10 per cent as long as you link it to its current account, into which you must pay at least £1,000 a month. The bank aims to take on Alliance & Leicester, which also offers 10 per cent in a similar linked deal, and HSBC, which pays 8 per cent in the same type of arrangement.

Banks are fighting for current account customers in the hope of then cross-selling other, more lucrative products such as loans, mortgages and credit cards.

The new Barclays deal also offers a 0 per cent overdraft for 12 months - but this then reverts to its standard annual rate of 15.6 per cent.

Other downsides, highlighted by price-comparison website Moneysupermarket.com, include any current account in credit earning only 0.1 per cent interest and, after one year, the 10 per cent savings rate slipping to 3 per cent.

Additionally, you can invest only between £25 and £250 every month in the savings account.

Research by Money-supermarket.com shows that, in comparison with the 10 per cent deal from A&L, the Barclays product offers less. With a constant £1,000 balance in your current account and saving the maximum £250 into the savings account, the website calculates that you'll be £50.16 better off with A&L across a 12-month period.

Bradford & Bingley has also launched a 10 per cent savings account. This has a £150 monthly limit and is only for 10 months, but it doesn't need to be linked to a current account.

Identity fraud: Call for companies to help victims

Special helpdesks should be set up by companies for customers who fall victim to criminals stealing their identity, according to the National Consumer Council.

In particular, it wants banks, insurers, credit providers and utility firms to establish dedicated departments and introduce a "minimum standard of service" when dealing with ID fraud.

Consumers who have been defrauded would be allocated a named helper by the company to help them unpick the mess of fraudulent accounts and purchases.

Today, there is no one body to which people can turn. In the aftermath of discovering a fraud, it's up to the individual to work with police, retailers and banks to try to sort out credit ratings and prove their innocence.

ID fraud costs the UK economy some £1.7bn, according to recent government estimates.

Interest rates: Hopes fade for cheaper credit

Borrowers hoping for an imminent cut in interest rates had their hopes dampened after the Bank of England forecast robust growth and inflation on track to stay close to its 2 per cent target.

In its Inflation Report, published every three months, the Bank forecast gross domestic product (GDP) of 2.7 per cent for 2006, compared with a prediction of 2.5 in November last year. It described the outlook for inflation as "broadly balanced".

Arguments for a rate cut have been based on poor consumer spending figures, rising unemployment and a slower housing market.

Last week's predictions of economic buoyancy - based on expectations that spending won't fall any further and that the property market will remain steady - are likely to rule out any cut in the near future.

The base rate has been kept on hold at 4.5 per cent since August last year.

The report did express concern about higher oil prices feeding through to larger fuel bills for consumers and businesses, but its view was that these would not result in significant inflation.

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