Martin Lewis outlines rise in average UK household energy bills
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Household energy bills have been soaring for months as the predictions from market analysts consistently exceed those of the UK’s energy regulator. Last week, Ofgem announced the price caps imposed on energy providers would be changed every three months instead of six. As a result, with prices already set to break records in October, consultancy Cornwall Insight today announced household bills could hit £4,266 as soon as January next year.
Energy prices were already high last winter, but since the imposition of sanctions on Russia in the wake of Vladimir Putin’s invasion of Ukraine, the situation has become far more severe.
Russia is the world’s largest exporter of natural gas and the second-biggest exporter of crude oil.
As the global supply became restricted, prices have soared.
The wholesale price the UK’s energy providers must pay for gas and electricity has reached an all-time high, and these costs are being passed on to consumers.
In England, Scotland and Wales, the maximum amount suppliers can charge their customers is fixed by the energy price cap set by state energy regulator Ofgem.
Energy industry analysts Cornwall Insight predict average annual energy bills will reach £3,582 when the cap is next raised in October.
According to charity National Energy Action, one in three or 8.2 million UK households could then fall into fuel poverty.
Last Thursday, the UK’s energy regulator Ofgem announced price caps would be changed every three months instead of six to avoid price shocks.
As a result, as soon as January 2023 energy bills will rise again, with the annual bill for a typical household expected to reach £4,266, according to Cornwall Insight.
Rising energy prices are a driving force behind the UK’s record 9.4 percent inflation in June, the highest rate in over 40 years.
Last week, the Bank of England forecast inflation reaching 13.3 percent in October as a direct consequence of the increase in energy prices.
In late July, the Government announced households would receive £400 to counter rising fuel bills in six instalments from October onwards.
Yesterday, it was revealed that the Government’s “reasonable worst-case scenario” could see the UK endure four days of blackouts in January with emergency measures possibly being triggered to maintain gas reserves.
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