Mark Carney says energy price hikes were higher than expected

http://www.theguardian.com/business/2013/oct/24/mark-carney-speaks-energy-price-rises

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The governor of the Bank of England has described a series of energy price rises announced by four of the big six electricity and gas suppliers as higher than expected.

Mark Carney said the increases on their own would cause a 0.15% increase in inflation forecasts for next year – though other downward factors cancel this out in the overall calculation.

Tariff hikes announced by the suppliers – with the latest unveiled by Scottish Power – have been running at more than three times the current inflation rate.

David Cameron is under pressure over the rises from the Labour party, which has pledged a price freeze if elected.

And former prime minister Sir John Major has called for a windfall tax on the suppliers.

Carney's remarks, following a speech marking the 125th anniversary of the Financial Times, are notable because the governor tries to avoid becoming involved in political controversy.

But when asked about the tariff hikes, he acknowledged they were "significant" and came "on the heels of other increases".

He said: "From an overall consumer price-based perspective, the prices that are coming out are a bit higher than we had pencilled in, in our last forecast.

"All of that results in about 15 basis points added to inflation next year, relative to our August forecasts.

"Since that forecast there have been a variety of other things that have moved it in the opposite direction."

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