Phone and broadband providers banned from linking prices to inflation

It has become common practice for phone, broadband and paid TV services to link their prices to inflation. Credit: Alamy

Regulator Ofcom has said it will prohibit mobile phone carriers and broadband providers from linking prices to high inflation figures during a customer's contract.

On Friday, new rules from the watchdog will require companies to be upfront and disclose any price increases.

This will mean from January next year, any price increases in a contract must be stated in pounds and pence.

Many major phone, broadband and paid TV services currently link their price rises to future inflation rates, which “unfairly” puts the burden of rising inflation costs onto customers, Ofcom said.

"We have decided to ban this practice," it added.

Saying that people “cannot predict” inflation and “do not understand (it) well".

It is a confirmation of rules that the regulator said it was looking at in December 2023. Ofcom telecoms policy director Cristina Luna-Esteban said: “With household budgets squeezed, people need to have certainty about their monthly outgoings. “But that’s impossible if you’re tied into a contract where the price could change based on something as hard to predict as future inflation. “We’re stepping in on behalf of phone, broadband and pay TV customers to stamp out this practice, so people can be certain of the price they will pay, compare deals more easily and take advantage of the competitive market we have in the UK.”

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