Energy bills forecast to rise by £146 to an average £1,714 in October
Millions of households will be hit by energy bill hikes of around 9% in October, forecasters warned today.
The respected consultancy Cornwall Insight said it expected that the cap on the average annual gas and electricity bill will go up by £146 from £1,568 to £1,714 on October 1.
The actual level of the new cap will be revealed by regulator Ofgem on Friday but Cornwall Insight’s forecasts have usually proved highly accurate.
It says a further “modest rise” is likely in January although a bigger increase is possible depending on the progress of the war between Russia and Ukraine.
The return to rising bills comes at a sensitive time after the Government scrapped the £300 winter fuel payment for pensioners except those on pension credit. Chancellor Rachel Reeves has estimated the move will save the Treasury around £1.4 billion a year.
The main factor driving prices back up again after big falls since the winter of 2022/23 is a rebound in wholesale energy prices since they hit 30 year lows in February.
Cornwall Insight said: “While prices have stabilised somewhat compared to the previous two years, the market has not fully recovered from the energy crisis and the impact of Russia’s invasion of Ukraine. As a result, the market remains highly sensitive to any global events that could disrupt supply.
“The UK’s reliance on imported energy leaves the country very vulnerable to this global volatility. This is seeing both household and business energy bills forecast to staying far above pre-crisis levels.”
Ofgem is currently undergoing a comprehensive review of the price cap with potential changes to elements such as the standing charge expected over the coming year.
Richard Neudegg, director of regulation at comparison site Uswitch.com, said: “This prediction compounds the worry that energy bills are going to rise just as we reach the season to switch the heating back on.
“A predicted 9% rise in energy costs would add £146 a year to the energy bills of the average household on a standard variabletariff.
“The price cap is expected to rise again in January, but bill payers can take action now to lock in certainty on how much they pay.
“There are a number of 12-month fixed deals available at rates cheaper than today’s firm prediction, so run a comparison to see what energy tariffs are available to you.”