Broadband and mobile bills are soaring in the UK – depending on who you talk to

In April each year, mobile and broadband bills go up for tens of millions of households. Until recently, most of the larger providers tied annual bill increases to the economy-wide rate of inflation, plus a fixed amount. Typically, this was the consumer price index (CPI) plus 3.9% – though some especially unscrupulous operators used the discredited retail prices index (RPI), plus the seemingly obligatory 3.9%.

These terms were introduced from late 2020 onwards, but had particularly severe consequences in April 2023. Soaring energy prices pushed CPI inflation into double digits, meaning that mobile and broadband bills increased by 14% or more. This dramatic jump is clearly visible in the official price data from the Office for National Statistics (ONS).

In July 2024, Ofcom decided to ban this practice. The regulator decided that customers didn’t understand these terms, and that the inflation risk should sit with companies, rather than households. From January 2025, any mid-contract price rises had to be spelled out in pounds and pence at the point of sale.

Digging into this, I was struck by three things.

First, if you believe the official data, the UK is a massive outlier. Between December 2016 and December 2025, across the euro area, the price of “wireless telephone services” fell by 20%, according to Eurostat. In the UK, ONS estimates suggest that prices increased by almost 40% over that period, before jumping again in April 2026 (something I’ll come back to). There’s a similarly dramatic divergence when looking at prices for “internet access provision services” (ie broadband) and for “bundled telecommunications services” (ie a combined broadband and TV package).

I say “if you believe the official data”, because this stuff is hard to measure. Often, the price listed online isn’t the one you’ll actually pay, if you ring up and haggle, or are willing to shop around. There’s also the thorny question of how to adjust for changes in the quality of service provided over time: if your bill stays the same, but your broadband speed doubles, has the price been cut in half?

Different countries take different approaches. A spokesperson for the ONS said that its approach “is consistent with best international practice and, in particular, our mobile phone charges methodology is considered to be the best approach to measuring price change to consumers”. Notably, Ofcom takes a different approach, and judges that the average price of average mobile use in the UK has barely changed since 2020. But it’s the ONS numbers that go into the official inflation figures.

There are two ways to interpret these trends – neither of them good. One possibility is that the UK really has seen mobile and broadband prices increase far more quickly than the rest of Europe. The other is that the ONS methodology struggles to capture things such as customer switching, discounts and improvements in quality and, as a result, could be overstating the “true” rate of inflation. A higher official measure of inflation would mean higher government spending on debt interest, a higher interest rate on student loans, and much else besides.

The second thing I was struck by was the absence of an April jump in the price data for countries other than the UK. The UK is unusual in having (until recently) indexed mobile and broadband prices to economy-wide inflation. This is part of a broader pattern: rail fares, alcohol duties, water bills and social rents are all mechanically linked to general inflation in some way or another. In many cases, it’s inflation plus an additional amount.

Victoria Clarke, chief UK economist at Santander Corporate and Investment Banking, argues that “the combination of indexation, regulated price formulas, and habit-driven pricing has made inflation a design feature of the UK economy in the post-2022 period”. This feedback loop is one reason why inflation has been stickier, interest rates higher, and expectations of higher inflation more entrenched than elsewhere.

Third and finally, I’m struck by how companies have responded to the ban on inflation-linked price rises. Told to spell out price rises in pounds and pence, firms have, according to Ofcom, generally imposed flat-rate increases on new customers (eg everyone’s bill goes up by £4 per month). The increase in April 2026 was pretty chunky: Clarke suggests that “even when prices are set in new pounds and pence terms, an increase tantamount to an ‘inflation-plus’ rise appears normal and accepted by British households”.

Note that a flat-rate pounds and pence increase means that cheaper packages are going up by more in percentage terms. More clarity on pricing is undoubtedly helpful, especially for vulnerable consumers. But the early signs are that lower income households could end up worse off as a result of this reform – a good reminder that when it comes to regulation, we should always worry about unintended consequences.

Photograph by Mike Kemp/In Pictures via Getty Images