Ofgem’s decision to lower its energy price cap will result in a reduction of approximately £425 in annual household energy bills, making gas and electricity more affordable throughout Britain.
The price cap saw a dramatic increase from £1,162 per typical household in August 2021 to an all-time high of £4,279 last year, triggered by Russia’s invasion of Ukraine and the consequent rise in wholesale prices.
As of July 1, the energy regulator has decided to bring down its price cap from £3,280 to £2,074.
The Government’s Energy Price Guarantee has provided some protection to households from the latest price surge by restricting annual energy expenses to £2,500 for an average household, which is below Ofgem’s previous price cap.
As a result, the typical annual energy bills will see a decrease from £2,500 to £2,074, a reduction of £426.
Jonathan Brearley, CEO of Ofgem, remarked: “Following a challenging winter season for consumers, it’s heartening to observe indications that the market is achieving stability and that prices are trending favourably.
Commencing from July, individuals should anticipate receiving lower energy bills, a positive move in the direction of reduced expenses.”
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