Energy bills could be set to fall lower than previously expected this summer, according to predictions. Energy bills for a typical household are predicted to fall to around £2,400 a year from July this year, analysts at Investec say.
The firm says the price cap is forecast to fall to £2,478 in July - over £150 lower than its estimate made on January 4. It says this is due to a warmer than usual winter after prices soared due to the Ukraine war putting pressure on global gas supplies.
Investec had previously said it expected the price cap to be £3,458 in April, £2,640 in July and £2,704 in October. However, it now predicts these will be £3,317 in April, then £2,478 in July and £2,546 in October. The UK has faced rising costs in the past year which have seen inflation hit a 40-year high and the Bank of England to predict a two-year recession - the longest since official records began.
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Investec's predictions would see the typical bill fall below the government's energy price guarantee which was introduced last October to combat rising bills. Under the scheme, the government caps the typical bill at £2,500 a year and subsidises any amounts higher than that. Without the price guarantee households would have faced average bills of around £3,549 a year from October to December and £4,279 a year from January 1, based on the energy regulator Ofgem's price cap.
From April 1, the government's price cap will rise to £3,000. However, if Investec's predictions are correct, the typical bill will fall below that figure from July, which will cut the government's bill for state support. However, bills will still be considerably higher than they were just over a year ago. In October 2021, the price cap was £1,277.
Earlier in January energy consultancy Cornwall Insight had predicted the typical energy bill would fall to around £2,800 a year, which would also be below the government's price guarantee. To get all the latest money-saving news straight to your inbox twice a week sign up here.
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