Energy prices in the UK are anticipated to rise by 9% starting in October as the country heads into the colder winter months. Ofgem is expected to announce the new cap on Friday.
Cornwall Insight analysts predict that Ofgem will increase the cap from the current £1,568 to £1,714 from October, which represents the average annual cost for a British household.
This adjustment follows recent volatility in the global energy market, with gas prices climbing in recent months, partly due to the ongoing conflict between Ukraine and Russia, as noted by Cornwall earlier this week.
Ofgem’s cap sets the maximum amount households can be charged annually and dictates the price suppliers can charge per unit of energy.
As a result, 28 million households in England, Wales, and Scotland will see higher energy bills from October to December based on their consumption.
Starting in October, electricity prices will increase from 22.36p to 24.50p per kilowatt hour, and gas prices will rise from 5.48p to 6.24p per kilowatt hour.
Daily standing charges will also go up, with electricity rising from 60.12p to 60.99p and gas from 31.41p to 31.66p.
These adjustments follow a recent rise in wholesale energy prices, partly due to increased gas costs resulting from the recent conflict involving Ukrainian forces. The new cap also reflects higher network and operational costs for suppliers, as well as adjustments for earnings and headroom allowances, according to Ofgem.
An additional 400,000 households are at risk of fuel poverty.
An additional 400,000 households are expected to fall into fuel poverty this winter due to the latest increase in energy prices, a charity has warned.
Starting in October, the total number of households facing fuel poverty will reach six million, as the government reduces support for pensioners amidst rising costs, according to National Energy Action.
Chief Executive Adam Scorer stated, “Struggling households are entering their third year of an energy crisis. Even before this crisis, our clients had no financial cushion. Now, they are burdened with unprecedented levels of energy debt and are severely limiting their energy use.”
He added, “The gap in support for vulnerable households not receiving means-tested benefits has widened. They cannot face another winter with even less assistance than before.”
