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Warning of Future UK Broadband Price Hikes as Inflation Jumps

Wednesday, Mar 22nd, 2023 (8:20 am) - Score 2,280
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Consumers hoping to see significantly smaller increases in the UK price of their broadband ISP, phone and mobile services next year were given an unwelcome wake-up call today after inflation, which had been forecast to fall sharply in 2023, unexpectedly jumped from 10.1% (CPI) in January to 10.4% in February (RPI also went up).

At present, most of the major telecoms providers have already announced average inflation-linked price rises for 2023 of around 14-16% (here) and many of those will hit bills from next month (the hikes are higher than inflation as big ISPs often add 3-4 percentage points on top). But the Bank of England recently projected that CPI inflation would fall sharply in 2023, to just under 4% by the end of 2023.

NOTE: Inflation is the general measure of how quickly prices for goods and services etc. are rising in an economy, which is often expressed as a percentage.

Similarly, we’ve just had three consecutive months of gradual falls in inflation, which the BoE and others have clearly been expecting to accelerate. All good news for consumers, as future price hikes are likely to be much less aggressive than they have been during 2023.

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However, such hopes have just been dealt somewhat of an unexpected blow, which came after the latest inflation figures were released for February 2023 – revealing an unexpectedly sharp rise. The Consumer Price Index (CPI) hit 10.4% (up from 10.1% last month) and the Retail Price Index (RPI) reached 13.8% (up from 13.4%).

BoE Inflation Forecast (February 2023)

BoE-Feb-2023-Inflation-Forecast

The surprise increase in February 2023 seems to have been driven by higher than anticipated prices for food, clothing (particularly children’s and women’s clothing) and alcohol in pubs and restaurants. But the fact that it happened at all, and to such a degree, is likely to cause some concern for all those expecting inflation to be falling, and sharply.

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Instead, inflation seems to be plateauing at its peak and staying there for much longer, but a sharp fall is still forecast. The question now is whether that fall will be as dramatic as originally expected, or if it may instead be much more gradual. The next release for March 2023 is likely to give us a better idea of how far off the current forecasts really are, since we expected CPI to be a bit BELOW 10% at the end of Q1.

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Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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26 Responses

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  1. Avatar photo Ad47uk says:

    One of the reasons I don’t want a 24 month contract.

    1. Avatar photo Bu says:

      I don’t want pay as you go sim only as it’s more expensive than a sim only contract especially unlimited everything a month.

    2. Avatar photo Bobby says:

      @bu – you don’t need a pay as you go sim to not have a 24 or even 12 month contract. Companies such as Lebara, Voxi (Vodafone network), Lyca, Gifgaff, Virgin [at the moment] (O2 network), 1p Mobile (ee network) and Smarty (3 network) all offer decent allowances for a good price with 30 day packs or contracts. You sometimes have to wait for a special offer for the very best deals but they do come round and you can normally avoid the price rises.

    3. Avatar photo Ad47uk says:

      @Bu, I have been using Smarty for a couple of years at least, and they have good deals and normally not locked into a contract. I have just changed to a different package, where I get better more data, and it costs me less. As Bobby posted, there are plenty of products around for sim only, just need to look.

    4. Avatar photo Haha says:

      1p offer max 10p a GB good deal

  2. Avatar photo John says:

    Consequences of all the money printing and how government cannot be trusted with managing currency, much less a CBDC

  3. Avatar photo Rich says:

    Bank of England recently projected that CPI inflation would fall sharply in 2023, to just under 4% by the end of 2023. NO BLOODY CHANCE! TORIES OUT!

    1. Avatar photo Andrew G says:

      BoE have been consistently wrong with every recent forecast, every single one predicting lower inflation than turned out. They’ve even be called out by the Office of Budget Responsibility for their poor and successively wrong forecasting. However, you have to remember that no official forecast is released without being subject to the malign and inherently dishonest influence of the government – as true of Labour and its cronies as the revolting current shower. If BoE had a forecast that was going to show frightening numbers, the governor of the BoE (who is appointed by the chancellor) will get a call, explaining that it’s really important that he “gives markets confidence”, with an unspoken element of “and you do like your £495k salary, don’t you”.

      Particularly bad for those who’ve (apparently) happily agreed to be locked into long contracts with built in inflation-plus price rises, but then again, if customers refused to accept such terms then ISPs wouldn’t offer them. Rip-off Britain is there because people are complacent.

    2. Avatar photo Phil says:

      Labour has also voted in favor, or even doubled down in many of the inflationary policies such as lockdowns (and even for firing medical staff). Saying tories out does not change the fact that it is a uniparty

    3. Avatar photo Mike says:

      It’s almost like people never learn, Tories out, Labour in, inflation up.

    4. Avatar photo Haha says:

      My mortgage is fixed until 2025 THANK GOD

    5. Avatar photo Buggerlugz says:

      Yes, because of course the Bank of England is totally separate, independent and completely uninfluenced in any way by the current UK government…

  4. Avatar photo Keith says:

    There’s still nine months to go before the inflation figures are published that they base price rises on. Bit unusual to post this now! Next month’s rises will hit customers quite hard.

    1. Avatar photo Andrew G says:

      “Bit unusual to post this now!”

      Whilst the number who read and take notice will be modest, it’s a timely warning to anybody who between now and next spring will be in the position of having to make decisions about entering a new contract. On the basis of a mix largely of 18-24 month contracts plus rolling notice customers and a few 12 month contracts, that’ll mean this ought to be of interest to above half of all contract customers for broadband and mobile.

      It should be of especial interest to those customers renewing in the second half of this year, as under any renewed 18 or 24 month contracts they’ll be subject to two of these inflation-plus rises.

  5. Avatar photo dAMINOUS says:

    Fiction:
    “Bank of England recently projected that CPI inflation would fall sharply in 2023, to just under 4% by the end of 2023”

    Fact!:
    last week’s Spring Budget, Tories boasted it would fall to just 2.9 percent at the end of 2023.

    Official figures show consumer price inflation climbed in February from 10.1 percent to 10.4 percent.

    Hunt has been grasping at straws, market forecasters were confidently predicting that inflation would fall to 9.9 percent in February.

    They weren’t even close!

    Long-term core inflation up 6.2 percent, when those highly paid analysts had predicted 5.7 percent. Worse, it’s the essentials that are rising fastest, with UK food prices up a terrifying 18.2 percent, the fastest growth since 1977, and gas and electricity bills soaring, too.

  6. Avatar photo Andrew G says:

    One of the major drivers of rising inflation is that the cost of energy has gone up hugely and that affects EVERYTHING else. You can’t make anything, move anything, sell anything, maintain anything, provide any service, compute or communicate anything without incurring costs of energy. And (using Ofcom’s own figures) whilst wholesale gas prices* are now back to where they were in mid December 2021 at 160 pence per therm, UK retail energy prices are around 96% higher than they were in December 2021, with B2B prices broadly up by equivalent proportions.

    * Gas power stations are the bulk of electricity generation, and also act as the price setter in electricity, so electricity prices should follow wholesale gas prices.

    1. Avatar photo Wilson says:

      Andrew G always correct and also worth pointing the cost of energy has gone up in great part due to the NetZero aka NetPoverty aka NetStupid climate cultism in action. The govt even went as far as banning fracking because it is better to import Russian energy resold through China (why support only one “bad regime” when you can support two in one go), the potato logic is that they can appear to look good at home when those other countries have worse environment standards

      Energy prices are exactly why something as basic as eggs now costs 3x more as a year ago. Control the food control the population. The EU also injecting crickets in flour without labeling it. They don’t want you to eat healthy eggs, they want you to eat the bugs which are cheaper to produce in the name of Greta

    2. Avatar photo Andrew G says:

      I worked in the energy industry for most of the past fifteen years, and whilst there’s considerable truth that Net Zero policies are a major driver of rising costs, fracking in the UK has always been a non-starter for reasons of geology and cost (too much to explain here). Added to that, wholesale gas prices are set by international markets, so even if we did have domestic gas reserves we’d still have been hit by the same wholesale price changes. The answer always was and still is a large fleet of standardised nuclear power stations, but that’s taking us further and further off topic, so I’ll have to leave it there!

    3. Avatar photo Wilson says:

      Not saying you’re wrong but if there is no business case for fracking then there is no need for all the flipflopping on the issue and the subsequent ban. There must be some surveys that have not been disclosed to the public that would actually make viable business plans, otherwise there would be no need for the ban. The govt does not lose money if a private company drills and fails to make a profit

      And agreed on the nuclear plants. However if the govt wasnt so far up in the net poverty, then it would’ve taken measures to keep electricity affordable rather than shooting itself in the foot. Even the Germans have figured this out and are now burning more coal than in the past dozen years

  7. Avatar photo Karl Betts says:

    The Consumer Price Index (CPI) is just an excuse to rip everyone off. Mobile phone and isp shouldn’t be allowed to do this anymore. We should all be able to leave a company anytime we want.

    1. Avatar photo Reality Bytes says:

      Rolling monthly contracts are available.

      They just don’t include a phone or you pay the install fees and a higher monthly rate to cover any equipment provided or whatever.

      CPI is just a number.

    2. Avatar photo Buggerlugz says:

      Yes, a number they all refuse to quote, so its just “X% +CPI” when CPI is 4 times higher than the amount they’re allowed to increase your monthly bill by.

  8. Avatar photo Wan says:

    BT informed me by post, saying my bill is up by £4 pm, but didn’t give the new monthly cost.

    Will be £32 pm for ADSL broadband, not sure how this compares with everyone else here? I’m stuck with them since I don’t have competition in my area

    1. Avatar photo Bobby says:

      @Wan – That is expensive for ADSL. For comparison, I pay £39 for 500Mbits Fiber but that also includes a 100GB Sim for my mobile and a backup dongle if the landline dies. My mum pays £25 for up to 76Mbps (she gets around 60Mbps). Those prices are after any price rises this year.

      Although you may only have BT, its generally only Opernreach, not just BT itself so there may be other providers who can offer their services. Try one of the comparison sites like moneysupermarket or compare the market to see whats available. You might even be able to re-contract with BT and save a bit.

    2. Avatar photo Wan says:

      Thanks @Bobby.

      Felt I was overpaying but your plans put in perspective how bad mine is.

      At the time, I used sites like those you mentioned, showing Sky, TalkTalk, Plusnet, BT & Shell. Case of best of a bad bunch in BT, others too expensive or offering slower speeds. Will most likely re contract once my current plan is over.

    3. Avatar photo Buggerlugz says:

      Wan, You’d be better off using 4g probably.

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