Gas prices 'to rise 5% in 2011'
13th August 2010
UK gas and electricity prices are set to rise by at least 5% in early 2011, the Bank of England has forecast.
Rising wholesale prices are expected to put energy companies under pressure to pass on higher costs to consumers over the winter.
The average annual gas bill could increase to around £800, up from £756, by the turn of the year, the Consumer Focus watchdog warned.
The Bank's Monetary Policy Committee (MPC) said the planned VAT rise in January is set to keep inflation above Government targets in 2011, and warned that gas and electricity costs could push it even higher.
In its quarterly inflation report, the MPC said: "There is considerable uncertainty about the scale and pace of the pass-through of changes in wholesale energy prices to the prices of gas and electricity faced by households and companies."
Consumers are already facing a spending squeeze as petrol and foodstuff price rises and the looming 20% VAT rate eat into their disposable income, with warnings from retail chain Next that prices could rise by 8% next year.
Copyright © Press Association 2010
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