Thousands of families already struggling to make ends meet this winter could now face the crunch question: heat or eat?
Up until now retail analysts had been expecting a bumper Christmas on the high street and online as glimmers of an economic revival sparked a festive spending spree.
But a string of sizeable hikes in energy bills is likely to slam the brakes on the Yuletide good cheer as families try to figure out where to trim the household budget.
And for thousands in the West Midlands, where figures this week revealed 254,000 people are still unemployed, those still finding life tough in the wake of the long slump since the recession are going to have to make hard choices about where to spend their money.
Inflation is still up at 2.7 per cent, and every family has seen its weekly supermarket bills rising as the cost of basic foodstuffs has surged in the last few years.
But the constant rise in the cost of simply trying to keep the lights on and the house warm is pushing many to the limit.
Families on a budget face deciding how long they can keep the heating on every day, or how warm they can keep their home, at a time when the country is braced for another winter of sub-zero temperatures.
There have even been some predictions that the UK facing the harshest winter in decades – even after some for the coldest weather on record over the last two years.
Meanwhile the other big energy companies are now almost certain to follow British Gas and SSE in slapping a big winter increase on their electricity and gas tarifs.
Consumer experts Martin Lewis has warned the price hikes will mean many people this winter will have to choose “between heating and eating”.
He said: “The most important thing to understand is that the big six energy companies are like sheep – where one goes, the rest will almost certainly follow in the next three months.”
And if the UK faces another arctic winter, as it has for the last two years, families will have to brace themselves for hefty household energy bills.
British Gas today warned its 7.8 million domestic customers that it was putting up its electricity prices by 10.4 per cent and its gas by 8.4 per cent from next month.
The average customer on a dual-fuel deal will see their annual bills rise by £123 to £1,444.
The British Gas hike kicks in from November 23, just over a week after SSE increases its bills by 8.2 per cent.
As well as the worry that families will face with such a large hike in the cost of heating, lighting and cooking, there will be anger that yet again the big energy companies have pushed up bills just before the winter.
That anger was compounded by the hefty profits the energy companies revealed several months later.
Earlier this year British Gas – owned by the Centrica group – made a pledge to use its annual earnings windfall from the recent arctic winter and spring to keep a lid on bills.
British Gas hiked tariffs by six per cent last November ahead of a bitterly cold period when gas consumption rose 18 per cent in the first four months of this year compared to 2012 – helping earnings at its residential arm to rise 3.2 per cent to £356 million for the first half of the year.
The company said in May that because of the economic pressures facing many customers, the board had decided that any benefit from the exceptionally cold weather would be used to maintain “price competitiveness”.
Today it blamed the hike on the increasing cost of wholesale energy prices, Government energy initiatives and higher network charges for delivering power to customers’ homes.
In August another of the big six energy companies, E.on, revealed its revenues rose £381 million after it hit gas customers with a 9.4 per cent price increase just before the freezing spring set in.
The German firm cashed in as its five million British customers turned up the thermostats in the coldest spring temperatures for a decade, helping push up its overall revenues to £4.47 billion
The latest price rises come after Labour leader Ed Milliband wrote to the big six companies warning they would face a consumer backlash if they fought his plans for a 20-month freeze on prices if the party won the next general election in May 2015. In response, energy companies warned the move could mean Britain facing blackouts, claiming firms deprived of the power to set their own prices would be in danger of ‘economic ruin’.
Angela Knight, chief executive of the power companies’ trade body Energy UK, said that while the price freeze was ‘superficially attractive’, it would ‘also freeze the money to build and renew power stations, freeze the jobs and livelihoods of the 600,000-plus people dependent on the energy industry and make the prospect of energy shortages a reality, pushing up the prices for everyone’.
And SSE has claimed that, as well as rising international wholesale prices for energy, the company was having to put up prices because of the “green agenda” – the pressure from Government to cut back on the amount of carbon they pump into the atmosphere.
It is starting to look like ordinary families are increasingly caught in the middle of a political battle between parties keen to press for “greener” policies and the energy companies.
At the same time, for all their fine words about caring for their customers, the energy companies seem set on making sure they make the maximum profit this winter.