Household energy bills set to rise – London Business News | London Wallet

According to new forecasts household energy bills are set to rise by around 1% from October by £17 to £1,737 a year when Ofgem’s price cap kicks in, experts at Cornwall Insights forecast.

Ofgem sets the price cap as to what energy suppliers can charge and on 16 August the latest price cap will be confirmed.

Wholesale electricity and gas prices have been “volatile” due to geopolitical factors, weather patterns and changes to policy, not excluding the Russian-Ukraine war.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said, “News of higher bills will not be welcomed by households, especially as winter approaches.

“While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs. It’s a reminder that the price cap reflects more than just the market price of energy.

“This immediate challenge underscores a broader uncertainty facing millions of households, with current forecasts suggesting a sharp drop in bills is unlikely in the near term.

“Longer term, Ofgem’s review of how Britain’s energy system costs are distributed could reshape the financial burden on consumers, but while some may see savings, others could face higher charges.

“The real hope for lasting relief lies in the longer-term transition towards clean power and energy independence, which offers the greatest prospect of both stability and lower costs.”

A Department for Energy Security and Net Zero spokesman said, “The only way to bring down energy bills for good is with the Government’s clean energy superpower mission, which will get the UK off the rollercoaster of fossil fuel prices and on to clean, homegrown power that we control.

“We are taking urgent action to support families this winter – in addition to expanding the £150 Warm Home Discount to 2.7 million more households, we are strengthening customer protections, including by giving people quicker and easier access to automatic compensation when their suppliers let them down.”