Ofgem announced today that the energy price cap will increase to £3,549 a year for an average household from 1 October 2022.
The British energy price cap is forecast to rise even further to £5,387 in January 2023 and £6,616 in April 2023 as consumers endure the highest inflation for 40 years. Cornwall Insight, the energy consultancy, predicts that “a typical household’s energy bill will be well over £3,000 a year for the next 15 months”.
The analysts’ predictions keep rising from earlier forecasts, with more than a £1700 rise for January compared to the first forecast, as wholesale prices have surged and Ofgem revised its price cap methodology.
Ofgem confirmed on 4 August that the cap will now be updated quarterly instead of twice a year, so that it can be adjusted more quickly to market volatility. The energy regulator warned that UK customers will face a “very challenging winter” as inflation surges due to geopolitical tensions and uncertainty over Russian gas supplies and calls for government action.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year,” said Jonathan Brearley, CEO of Ofgem. “With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”