Households will pay £500 less than feared on their energy bills in the second half of this year

After the war in Ukraine, gas prices fell to their lowest level since before then.

Investec forecast Wednesday that the energy price cap (which dictates how suppliers can charge customers) will drop to 32,600 per annum from July, according to Investec.

This is almost £500 less than what the wealth management company had previously forecast at around £3,100 per annum.

It would also be less than the Government’s first energy price guarantee.

This guarantee ensures that a household will not pay more than £2,500 per annum this winter, but it is expected to increase to £3,000 starting in April.

Martin Young, an energy analyst with Investec, stated that lower forecasts were due to falling wholesale energy prices.

This comes after the European benchmark natural gas price plummeted to levels not seen since the Ukraine war. Warmer-than-expected temperatures have eased concerns about storage and shortages.

On Wednesday, gas was trading below EUR70 per megawatt-hour. This is the lowest level since February 2013.

Cornwall Insight also predicted Wednesday that July bills would drop to £2,800 per annum, which is lower than its previous forecast of £3,160.

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