O2 to Raise Mid-Contract Bills 40%

O2, part of VMO2, will raise monthly mobile and SIM-only bills by £2.50 from April 2026 for almost all mid-contract customers, affecting roughly 15–15.6 million people. That increase is about 40% higher than the £1.80 previously written into many contracts (roughly £30 versus £21.60 a year) and will disproportionately hit cheaper plans. The change exploits a loophole in Ofcom's January 2025 reforms — providers are barred from inflation-linked rises and must publish increases in pounds and pence, but can still apply larger rises while offering penalty‑free exit — prompting Ofcom to call O2’s approach “disappointing”, write to major firms and urge customers to use their exit rights. Consumer expert Martin Lewis has written to Chancellor Rachel Reeves calling for tightened rules and urged affected customers to leave, and analysts and campaigners warn the move could set a precedent, add inflationary pressure and worsen the cost‑of‑living squeeze. Customers are advised to check their contracts, consider switching using their penalty‑free exit rights, and press regulators or government to close the loophole.