Official figures cast doubt on claims by the UK’s biggest energy firms that rising wholesale costs are to blame for their inflation-busting price hikes. However, data from Ofgem, the energy regulator, suggests that wholesale prices rose by only 1.7 per cent over the last year.
Four of the “Big Six” energy companies have raised already raised their bills by up to 10.4 per cent, with the remaining two expected to follow suit.
The usual suspects have been wheeled out to try to justify these rises such as Angela Knight chief executive of Energy UK, the body which represents energy companies, who claimed that energy company profits equated to just “four or five pence in the pound”. Her comments were criticised by consumer groups, who said that for millions of people struggling with rising bills energy company profits represent an “enormous sum”.
The cartel behaviour of these companies should surely repel true free marketeers as there is no vigorous competition to drive down prices. Prime Minister David Cameron’s main advice appears to wear another jumper.