Millions of families will see their energy bills rise again from the beginning of January, a new forecast has warned.
Industry regulator Ofgem is expected to announce next Thursday that the energy price cap will be increased to 28.94p per unit of electricity and 7.42p per unit of gas from the start of next year.
It means that the typical household’s bill will rise from £1,834 per year to £1,931, according to experts at consultancy Cornwall Insight.
We have released our final price cap forecast for January -March 24, forecasting a 5% rise in bills.
We are predicting a typical household will pay: £1,931 p/a
Read more on our predictions below: https://t.co/n9KppW1wPf
— Cornwall Insight (@CornwallInsight) November 16, 2023
It is Cornwall’s last forecast of what the price cap will be before Ofgem announces the level next week.
The forecasts show that the typical bill will then fall to £1,853 from the start of April, but not reduce to below today’s level until July next year.
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.”
He added: “The King’s Speech acknowledged that it is our exposure to volatile international energy markets that has led to higher and less predictable bills.
“While we continue to advocate for immediate targeted support for vulnerable consumers, it is evident that the only enduring solution lies in transitioning the UK away from the influence of global energy prices towards sustainable, domestically-sourced energy.”
🗣️ Standing charges cover costs such as maintaining energy networks, wires and pipes that supply energy to our homes
We're launching a call for input to open the discussion on whether changes are needed
Tap the link for more on the consultation process https://t.co/5rGZE75Rot pic.twitter.com/RxZPtJxMbQ
— Ofgem (@ofgem) November 16, 2023
The consultants also warned that their forecasts imply that the standing charge will rise by 8p per day from the start of April.
All households have to pay the standing change, meaning that any increases disproportionately affect those who use less energy.
Cornwall said recent milder weather is helping to bring down gas prices, and this could help reduce bills next year if it continues.
But “sharp price falls are not expected”, it said.
