Ofgem’s new price cap came into effect on Saturday, with the headline level falling by £1,000 per household to £3,280. This price cap limits the amount that retail energy suppliers can bill households, which ultimately limits suppliers’ ability to pass on the cost of the soaring wholesale prices they’re facing. These prices are far beyond what households and businesses can afford. The government has responded by limiting the consumer burden to £2,500 for three more months, and itself footing the difference in the bill.
It’s remarkable that such an expensive policy is still just a sticking plaster. While overdue help for households is nothing to be sniffed at, the temporary price cap does nothing to address the defective structure of our energy market at the root of the crisis.
