The CEO of energy regulator Ofgem has predicted that average customer energy bills will start to fall in July. Jonathan Brearley shared the "good news" while being quizzed by MPs this week.
He told the Business Select Committee he expects household energy bills to dip beneath the Government's Energy Price Guarantee in July, the Express reports. The forecast will be welcomed by millions of households who have been hit by soaring gas and electricity prices amid the cost of living crisis.
"We recognise, everyone recognises that customers are in an incredibly difficult position right now," he said. "The gas crisis has stages and right now we are seeing the full impact on customers’ bills.
"Last time we were here, over the summer, we thought that without the Energy Price Guarantee (EPG), the price might be almost £6,000 a year for the average household. There is some good news, the market has changed quite significantly and for the first time since the start of gas crisis we are seeing downward pressure on the prices.
“On existing projections that the EPG will be breached by price cap in July and indeed that means bills going down for customers and significantly reduces the fiscal cost for the EPG in the first place.”
The EPG was announced by Liz Truss in September last year during her brief tenure as prime minister. It froze energy bills at £2,500 for the average household from October 2022.
While the EPG was set to be raised this April to £3,000, households have received a glimmer of hope, as experts at Cornwall Insight predict that energy bills are set to fall twice this year. The research firm's latest forecasts for the Default Tariff Cap, commonly referred to as a price cap, have found that without Government support, a typical household will pay about £3,208 from April.
While this is significantly higher than what Britons are paying right now, the price cap was previously estimated to hit £3,545.31 in the same period. The energy experts also predicted that after the April to June quarter, households' energy bills will tumble to approximately £2,200 from July, and would stay that way until the end of the year.
They wrote: "Our forecasts show prices in the second half of 2023 remaining below the Energy Price Guarantee (EPG) level, and therefore will not cost the Government any money from July."
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