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UK Energy Inflation ‘The Highest In Europe’

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USwitch

The UK has the highest level of energy inflation in the EU, according to a new report from the Organisation for Economic Co-operation and Development (OECD), which says the rising cost of powering the home is placing an additional squeeze on consumers’ finances.

Energy inflation in the UK was found to be up 2.2% on this time last year. This was four times the rate of increase in Germany, and in many other European countries, including France, Belgium, Denmark and Spain, energy prices actually dropped.

Analysts believe that this trend in the UK is likely to be due to the low pound, as well as the fact it has less competition than other markets.

Energy was not the only cost of living that has rocketed over the past year, however.

Food prices in April had shot-up by 4.6% since the same time last year, it was revealed. This compared to just 3.7% in Germany, 1.6% in France and just 1% in the US. Ross Walker, chief economist at the Royal Bank of Scotland, commented: “The concentration of the big four supermarkets in the UK must have given them pricing power.

This follows figures from the Office for National Statistics (ONS) which showed that the country’s official inflation rate stands at around 2.4%. The Bank of England has consistently missed its target, which is set at 2%, since December 2009.

Energy prices have risen sharply over the past few years, becoming an increasing problem for cash-strapped households. To make matters worse, wages are growing very slowly.

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