Domestic Energy Prices Set to Increase in the New Year
As we approach the New Year, consultancy Cornwall Insight has forecasted that domestic energy prices are expected to rise once again. The consultancy, known for its accurate predictions, anticipates that households using a typical amount of gas and electricity will see their annual bills increase to £1,736 starting from January. This represents a £17, or 1%, rise compared to the current average annual bill of £1,717, with prices expected to remain high throughout the winter season.
Implications of Rising Energy Prices
- Households facing higher energy bills may struggle to cope, particularly during the colder months
- Charities are expressing concerns about the impact on less well-off households and pensioners
- Energy regulator Ofgem will announce the next official quarterly price cap on Friday
Understanding the Energy Cap
The energy cap sets the maximum price that can be charged for each unit of gas and electricity, rather than the total bill. This means that individuals residing in larger properties with higher energy usage will typically pay more overall, while those in smaller properties tend to pay less.
Ofgem’s price cap impacts 29 million households in England, Wales, and Scotland, with different regulations in place for Northern Ireland.
Expert Insights on Energy Prices
Dr. Craig Lowrey, principal consultant at Cornwall Insight, noted that while energy bills will largely remain unchanged from October, the lack of a price drop following previous increases in the Autumn is disappointing for many consumers. He highlighted that current prices are well above historical norms, with no indication of returning to pre-energy crisis levels sparked by the conflict between Russia and Ukraine.
Conclusion
As households prepare for the New Year, the prospect of higher energy prices looms ahead. With concerns over the impact on vulnerable groups, it is essential for consumers to be vigilant and explore energy-saving options to mitigate the financial burden.
FAQ
How will the energy price cap affect households?
The energy price cap sets limits on the maximum price for each unit of gas and electricity, impacting overall energy bills for consumers. Larger properties with higher energy usage may see increased costs, while smaller properties could benefit from lower bills.