Ofgem has announced another huge increase in the energy price cap, which will rise to £3,549 per year in October. The new price cap, announced on Friday morning, is a rise of more than 80% on April's figure of £1,971 and will come into effect for around 24 million households from October 1.
Research is already forecasting that more than 40 million people in the UK could face fuel poverty as a result of soaring energy costs, with further increases to the price cap on the cards next year. You can read all our latest update's on today's announcement here.
But with the price cap jumping yet again, it has left many wondering when we might finally see a fall in prices. Independent energy analysts Cornwall Insight have published their latest predictions about how much the energy price cap is likely to be in each quarter in 2023. It is important to note that these are partly based on wholesale energy prices for gas and electricity, which are volatile, so this could change drastically.
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According to MoneySavingExpert.com the energy price cap changes will occur on the first day of January, April, July, and October. These prices will be announced on:
- November 24
- February 27
- May 26
- August 25
Publishing its predictions for next year's price caps - which are now reviewed quarterly rather than every six months - Cornwall Insight suggests another increase in January 2023 (which will be announced in November) to £5,386.71 - another 52% increase. As for next April, which will be announced in February, the price cap is predicted to jump once again to £6,616.37.
According to Cornwall, it won't be until the third quarter of 2023 - meaning the announcement that will come next May and come into effect next July - that the cap actually falls to £5,897.12. Even if that does happen, that figure is still 66% higher than the new price cap announced today. A further fall to £5,887.31 is currently forecast for the final quarter of next year.
In a statement on the new price cap on Friday, Cornwall Insight said the rise was "unfortunately inevitable" as UK bills continue to fall victim to an "unstable and unpredictable global market."
Saying the energy crisis was "showing no sign of abating" they said the increase showed the "need for greater reflection on the cap’s purpose and continued place in the energy market. Throughout the energy crisis, the government and Ofgem have remained committed to the cap, and in its ability to shield consumers from a volatile energy market," they said. "However, the cap was never meant to be a permanent solution, it was created for a different energy market than the one we face today and has not protected consumers from what will be incredible hardship this winter. We urge, as we have done previously, for the cap to be reviewed and mechanisms for protecting the most vulnerable, such as social tariffs, to be considered as viable alternatives."
While these predictions are far from concrete and a lot can change in the coming months, the early signs show there is a way to go yet before we can expect our energy bills to ease up.
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