Energy bills are set to dip by another 7.7% in July, on top of next week’s sharp fall, but will rise again by next winter, sector experts project.
Energy consultancy Cornwall Insight has published its latest projections for the Energy Price Cap. Based on current wholesale energy prices and futures markets, Cornwall predicts that the cap figure will fall to £1,560 on 1 July. However, it will then rise to £1,631 on 1 October, before remaining close to unchanged at £1,634 for the three months from 1 January.
The April-to-June cap figure has already been set by the Government at £1,690.
Those levels are a long way below the prices seen in 2022 and most of 2023 after Russia’s invasion of Ukraine, but still very high by historic standards.
The price cap is applied per unit of energy, but the figure that is typically used when discussing the cap is based on the annual bill an average household would face under the cap. As a result, it is possible for a household’s bill to come in higher than the cap figure, and for many households this is a common occurence.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “With wholesale prices hitting a two-and-a-half-year low, it was only a matter of time before a slight rise occurred as the market stabilises. Changes from Ofgem have also left their mark on the price cap with those paying via direct debit due to see a small cost in order to level the playing field for prepayment customers.
“While no household will want to see forecasts rising, it’s important to recognise that these do still represent a fall from the new cap coming in from April, itself a large drop. So there is every reason to remain optimistic for energy bills moving forward.
“However, with both Ofgem and the government seeking views on the future of the default tariff cap and consumer protection in general, it is apparent that we need an enduring solution to the challenge of energy bills that remain hundreds of pounds above the levels we saw prior to the energy crisis.
“The next government, regardless of its composition, will face numerous competing priorities. Yet, it must maintain a focus on securing our energy future, whether this be bolstering our investment in renewables, modernising our grid, or streamlining the infrastructure development process, such measures are essential for fostering affordable and stable energy costs for both households and businesses.”
