Gas prices in the UK shot up nearly a third in the last week of July to reach the highest average cost since mid-March, according to newly released official data.
The gas price increased by 31 percent in the week to July 31, the Office for National Statistics (ONS) said on Thursday.
Surging Energy Prices
Energy prices have risen significantly in recent months with prices surging by two thirds in the first week of March, following Russia’s invasion of Ukraine on Feb. 24.
Spending on car fuel jumped 9 percent in the week to July 31 compared to the previous week. It was also a 54 percent increase on the previous year and more than double the average amount spent in February 2020 before the COVID-19 pandemic struck.
Fuel prices hit their highest-ever levels earlier this summer. But major retailers are failing to lower petrol prices in line with wholesale costs of unleaded petrol dropping over the past two months, motoring group RAC said this week.
At a press conference following the rate rise, Bank of England Gov. Andrew Bailey highlighted the impact of soaring energy costs on the wider economic picture.
He said the “further sharp increase in energy prices” had been the biggest development in recent months.
“Wholesale gas futures prices for the end of this year … have nearly doubled since May,” he said, adding they are “almost seven times higher” than forecasts had suggested a year ago.
“That’s overwhelmingly a consequence of Russia’s restriction of gas supplies to Europe and the risk of further cuts,” he said.
The bank’s rate-setting body, the Monetary Policy Committee (MPC), said inflationary pressures in the UK and the rest of Europe have “intensified significantly” since its last policy report in May.
Expecting the wholesale energy price rise to feed through to retail energy prices, the MPC said it expects near-term inflation to rise higher than previous forecasts.
It said Consumer Prices Index (CPI) inflation will hit 13.3 percent in October, the highest for more than 42 years, owing to soaring gas prices.
Tom Ozimek and PA Media contributed to this report.