The number of households that have switched gas and electricity suppliers so far this year has reached more than 2.8 million, and this is expected to rise to 4.8 million by the end of the year, according to research from energy watchdog Ofgem.
Ofgem Chief Executive, Alistair Buchanan said: “With 2.8 million households switching in the first half of the year the heat is still on suppliers to offer customers the best deal for their energy. With winter drawing in and all suppliers having lowered their prices, now is a good time for all customers to check whether they are getting a good deal for their energy.”
However, while 200,000 more people have switched than as this time last year, those who have not switched suppliers are not getting the most competitive rates and could be losing up to £170 each year. Consumers could be forking out substantially more than necessary by paying quarterly bills; the cheapest way to buy energy is to have a dual fuel deal and to pay by Direct Debit which can save £60 a year alone.
Lower energy bills have contributed to inflation remaining static at 1.8 per cent, which has been unchanged for three consecutive months; it is at its lowest since March 2006, and remains two per cent below the Bank of England’s target. Economists predict that it will rise to 1.9 per cent by the end of the year and that the low Credit Price Index (CPI) leaves room for a cut in the base rate for November.
In addition to falling gas and electricity bills, lower clothing and footwear prices have also contributed to the unchanged inflation rate, but inflationary pressure will be generated by soaring food bills (the price of dairy surged 6.3 per cent in September), and the record price of oil, which rose yesterday to $87.97 (£43.31) a barrel.
The migration of grocery shopping to the world wide web is also expected to have an impact by doubling over the next five years to be worth £5 billion, with one in ten people doing their grocery shopping online. However, it will still only account for a small fraction of the £156 billion grocery industry.
While headline inflation has remained the same, Alliance Trust has found that inflation for individual groups has risen. The over 75 age group, for example, is experiencing a 2.2 per cent inflation rate because a large proportion of their income is spent on food; the under 30s are the second hardest hit, facing a rate of 2.1 per cent as a result of the rising costs of rent, interest rates and education.
Shona Dobbie, Head of the Alliance Trust Research Centre said, “Our study continues to highlight the extent to which inflation hits different age groups. Throughout the entire course of our four year study, the elderly have consistently suffered the highest levels of inflation…More than four years of higher-than-average inflation has eaten into pensioners’ budgets and left them struggling to pay higher bills.”
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