Energy costs for most British households to fall 18% from July -Cornwall Insight
Energy costs for most British households are expected to fall around 18% from July with regulator Ofgem poised to announce a cut in its price cap next week, analysts at energy consultancy Cornwall Insight said.
The government has guaranteed to keep average household energy bills below 2,500 pounds ($3,155) a year until the end of June to help with a cost-of-living squeeze after wholesale energy prices hit record highs following Russia’s invasion of Ukraine.
Cornwall Insight forecasts Ofgem’s price cap will fall to 2,054 pounds a year for average use, saving an average household around 446 pounds a year.
“As many people continue to suffer from the cost-of-living crisis, this will hopefully bring some cautious optimism that the era of exceptionally high energy bills is behind us,” said Craig Lowrey, Principal Consultant at Cornwall Insight.
Despite the expected drop he warned household energy costs are likely to remain well above pre-pandemic levels for the near future.
“Those hoping to see a return to the kinds of bills seen at the start of the decade will be disappointed. Regrettably, it looks as if these prices may become the new normal,” Lowrey said.
The price cap in April 2020 was set at 1,162 pounds a year.
Cornwall Insight forecast the cap will fall again slightly in October, to an average of 1,976 pounds a year before edging up to 2,045 pounds a year in January 2024.
Ofgem will announce the price cap for the July-September period on May 25.
Source: Reuters (Reporting By Susanna Twidale; Editing by Kirsten Donovan)