In July, household energy bills are predicted to decrease by 13%, as the price cap is projected to reduce to £2,165 per annum.
This projection from Investec is over £300 less than the current £2,500 energy price guarantee set by the Government. Furthermore, it is expected to be over £800 cheaper than the cost that consumers will incur from April when the guarantee increases to £3,000.
Due to the decline in gas prices, the average annual energy bill for households is set to decrease by over £800 starting from July, marking a year since Russia’s initial invasion of Ukraine.
The predicted price cap for energy bills is expected to fall to £2,165 from July onwards, which is a significant reduction from the £3,000 cap imposed by the Government’s energy price guarantee in April.
This decline in prices is the result of mild weather conditions across Europe, leading to high natural gas storage levels and subsequently, lower wholesale costs.
However, in August, the cost of wholesale gas skyrocketed due to efforts by Europe to reduce dependence on Russian fuel. The price cap is set to rise moderately to £2,190 from October, with Investec’s final estimate for the April price cap being £3,332.
The Government will cover the difference, paying £332 per household to ensure the annual average energy bill stays within the £3,000 cap limit, which is an increase from the present cap of £2,500.
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