Ofgem price cap expected to rise from January suggests Cornwall Insight forecast
Households could face another increase in their energy bills within weeks, according to the latest predictions.
Energy regulator Ofgem will announce on Thursday the charges for the January price cap – which will control how much suppliers can bill customers on default tariffs.
While it had been hoped, after a difficult 12 months, that prices may come down over the next year forecasts suggest that millions of families will most likely see bills rise again from the new year.
Ofgem is expected to announce on Thursday that the energy price cap will be increased to 28.94p per unit of electricity and 7.42p per unit of gas.
This means that a typical household, using a typical amount of energy, would see their bill rise from £1,834 per year to £1,931, according to experts at consultancy Cornwall Insight.
Those using more or less energy than that deemed to be the average would obviously see their bills change accordingly.
The energy price cap is adjusted every three months – to reflect changes in the market and wholesale prices.
Further forecasts by researchers suggest a typical bill will fall in April to £1,853 but not reduce to below today’s level until next July at the earliest, when the cap is adjusted again ahead of the summer months.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels.
“This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between.”
Last winter households across the country were helped with the sky-high price of winter energy thanks to the £400 Energy Bills Support Scheme which gave customers money-off their bills.
More than 29 million homes took advantage of the government policy between October 2022 and March this year.
However despite the predicted rise in bills for January 2024, it is not expected that the government will reintroduce the scheme, favouring instead more targeted help for struggling households.
This includes the £300 cost of living cash being sent this month to those claiming means-tested benefits alongside additional financial support for pensioners.