Gas and electricity rises set to increase strain on household bills

Rising gas and electricity bills will ratchet up the pressure on household finances this year despite inflation hitting its lowest level for nearly three years last month, experts warned.

The Consumer Prices Index hit a near three-year low of 2.2 per cent in September – the lowest since November 2009 and down from 2.5 per cent in August – mainly driven by utility price hikes last autumn not repeated this year.

But with four of the "big six" energy firms announcing rising prices in recent days, economists think inflation is set to resume its upward march.

Chitraj Channa, an economist with the Centre for Economics and Business Research, flagged up the recent price rises and said the September inflation figures were "likely to be the trough before the climb".

He added: "Oil prices have continued to remain high with Brent crude trading at approximately $115 per barrel. Furthermore, droughts and poor harvests in Russia, the US and India are set to increase the price of agricultural commodities."

The figures also revealed a 3.9p rise in petrol prices during September, in contrast with a slight fall a year earlier.

Rising oil and fuel costs are also putting pressure on factory gate prices, which jumped 0.5 per cent month on month.

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