UK
Households warned of potential £1,400 rise in energy bills by next year
Households across Britain might be in for an even bigger shock than expected this winter after one of the country’s premier energy consultancies warned of steeper bill rises.
Cornwall Insight said the price cap for the average household could go up in January by £360 more than previously thought.
Its experts said bills could rise from today’s record £1,971 to £3,245 in October and then further to £3,364 at the start of next year.
It marks a steep rise from Cornwall’s previous predictions, as international gas prices remain stubbornly high.
In its previous forecast, on June 22, the energy consultancy predicted bills rising to £2,981 in October, and £3,003 in January.
The forecasts are based on what an average household will spend on gas and electricity in a year. A household that buys more energy will see higher bills, and vice versa.
The new predictions are bleak, and will put further pressure on households already facing rising food costs amid the cost-of-living crisis.
In April energy bills rose 54% for the average household.
Dr Craig Lowrey, from Cornwall Insight, said: “There is always some hope that the market will stabilise and retreat in time for the setting of the January cap.
“However, with the announcement of the October cap only a month away, the high wholesale prices are already being ‘baked in’ to the figure, with little hope of relief from the predicted high energy bills.”
Before he left office, former chancellor Rishi Sunak announced a £15 billion package to help with the rising cost of living.
It promised up to £1,200 for the most vulnerable households.
But the price cap was at £1,277 last winter, so if Cornwall’s January predictions are correct, households will be left nearly £900 worse off than they were before the crisis, even with the maximum help from the Government.
The consultancy said the energy market has become increasingly volatile amid uncertainty over the gas that Russia sends to Europe, while recent strikes by Norwegian offshore workers have also driven up wholesale costs.
Ultimately these prices will trickle down to consumers.
“As it stands, energy consumers are facing the prospect of a very expensive winter,” Cornwall said.
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