Energy bill rises curb fall in inflation
Sunday 13 October 2013
Looming hikes in gas and electricity costs are likely to keep inflation higher for longer next year despite another fall in the cost of living expected in September, economists have warned.
Scottish and Southern Electricity's 8.2 per cent average rise in bills, due next month, is set to trigger similar moves from rival energy companies in the days ahead, keeping up the pressure on inflation.
The Bank of England's Consumer Price Index benchmark is forecast to have fallen to its lowest level since April in September – to 2.6 per cent – as big rises in petrol and clothing prices a year earlier are not repeated this time. But experts said another round of rising energy bills risked "sticky" inflation next year.
Royal Bank of Scotland economist Ross Walker said: "With an underlying strengthening in the recovery, another round of hefty utility price hikes in the pipeline, and a more accommodative Monetary Policy Committee (MPC) remit, the risks remain skewed towards an ongoing overshoot of target in 2014."
The EY ITEM Club underlined the improving prospects for the UK economy, raising its growth forecasts this year to 1.4 per cent from 1.1 per cent for this year. It attributed a bubbling housing market and rising consumer confidence for the upgrade.
The MPC expects that inflation will return to 2 per cent by early 2015, although the unemployment rate is now the prime focus under the Bank's new forward-guidance regime.
The MPC will not consider rate rises until the jobless rate falls to 7 per cent. Figures for the quarter to August due this week are expected to show it unchanged at 7.7 per cent.
- 1 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 The enemy within: People who hear voices in their heads are being encouraged to talk back
- 4 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
- 5 SAG Awards: Fake applause track interrupts Reese Witherspoon
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Asteroid narrowly scrapes past Earth: how to watch the closest space rock for decades as it flies by
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...