The Energy Price Cap is to rise again, according to sector expects Cornwall Insight, in a sign that cost pressures haven’t gone away despite recent good news.
Consultancy Cornwall insight published its latest predictions for the price cap today, based on wholesale energy prices yesterday. The price of energy at the midpoint of a cap period, which was yesterday, is a key factor in deciding the price for the period that follows.
The analysis suggests that the cap will be set at £1,931.25 from January to March 2024, up by nearly £100 on the current level of £1,834. The listed figure for the cap is based on the amount a typical household would pay based on a year’s energy use. However, the cap itself is charged on a per-unit basis, meaning that a household that uses more energy will always be charged more: it is not a maximum amount that a household can pay.
The rise comes as the price of gas climbed in recent months, mostly due to geopolitical concerns related to the conflict in Israel and Gaza. Labour issues among Australian gas workers played a part too.
The new cap would be well below where it was in the fourth quarter of 2023. However, during those months households received monthly payments of £66 as support from the Government. That scheme expired, meaning households are now set to bear the full brunt of sky-high energy costs.
For larger households, bills will still be lower than last winter even without the support. But for those living alone or couples without children, energy bills are likely to be higher than ever.
The predictions come just a day after the official rate of inflation fell sharply to 4.6%. That decline was driven mostly by the energy price cap coming down in October. But the new figures from Cornwall Insight show that the remainder of the fight to bring prices back under control may be the most difficult part.
Andy Prendergast, national secretary of the GMB Union which represents a number of workers in the UK gas sector, said: “These price hikes just show how we have lost control of our energy system.
“At the exact moment when consumers are being told that inflation is falling, they get the news that bills are going up again.
“Rather than get a handle on the energy situation, we continue to see a failure to meaningfully invest and provide a plan that will give us energy security and bring down bills.”
