As Clear As Mud – The Annual Price Increase Regime is Changing

Following the unexpectedly large tariff increases in 2022 and 2023, in the region of 13% to 15% (see our earlier blog on this), the Government initiated a rule change as OFCOM introduced new requirements.

In a nutshell, under the old system of “price increases defined as the annual inflation rate plus 3.9%”, O2, EE, and Vodafone are now launching a new system that “clearly states the amount of tariff increase you can expect in any given year”.

While this change will make price increases more transparent, they are not going away. We expect that, in any normal year, the now fixed price rises will likely be in line with what the previous system generated, if not slightly higher. That said, it should provide consumers and businesses with better protection from the extreme fluctuations seen in 2022 and 2023.