Winter energy prices expected to rise to three-year high
Millions of households will be affected by an increase in the energy price cap by regulator Ofgem.
By BBC News
Millions of households across England, Scotland, and Wales are expected to face higher energy bills this winter, as the energy price cap is forecast to rise to its highest level in three years. The increase, set to be announced by the regulator Ofgem, will take effect from October.
Analysts predict that the cap will increase by 4% from the current level, bringing the typical annual bill to approximately £1,729.
It is important to note that the price cap does not limit a household’s total bill; rather, it sets the maximum price per unit of gas and electricity. The final costs will still depend on individual energy usage and payment methods.
This rise in energy prices coincides with the onset of colder weather and follows fluctuations in international wholesale gas prices. Ofgem has indicated that the increase reflects the rising wholesale costs of gas, which suppliers are currently facing.
Neil Kenward, Ofgem's director general for markets, stated that high international gas prices continue to drive energy costs in the UK. He welcomed the government's decision to remove VAT from electricity bills, which is expected to provide some relief to consumers this winter.
Currently, around 35% of households, or approximately 11 million, are on fixed tariffs, meaning their prices will not change. However, 22 million households in England, Wales, and Scotland are on tariffs that will be affected by the price cap increase.