Households expect to learn that energy bills will rise again
Bills are forecast to rise because of an increase in the cost of gas across Europe, as Ofgem reveals the new energy price cap on Tuesday.
Millions of households will find out on Tuesday about an expected rise in their energy bills from April, as regulators announce new prices for the spring and early summer months.
Watchdog Ofgem will announce the new energy price cap for April until July, as experts forecast bills will rise by about 5% compared with what they are currently.
Last week, forecasting group Cornwall Insights said it expects the typical annual household energy bill will rise by about £85 to £1,823.
The expected rise is because of an increase in gas prices across Europe, caused by a slump in the amount of gas that is held in storage across the continent.
The energy price cap sets a maximum price that energy companies can charge people in England, Scotland and Wales for each unit of energy they use.
Ofgem changes the price cap for households every three months.
While the price cap is likely to go up, in practice, most people will pay less to their energy suppliers in the spring and summer months.
That is because households typically use less energy then, but the rate they are paying per unit would still rise.
Another increase in the price cap would mark the third consecutive time costs have risen in recent quarters.
It would come as a blow to Labour’s election promise of reducing energy bills by “up to £300 by 2030”.
The Government has started a massive push towards wind and solar energy in recent months to make the UK less dependent on global gas prices.
Experts have said this will likely make energy more affordable in the long term, but campaigners called for ministers to provide short-term help for people struggling with bills next winter.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, a campaign group, said high power prices have “gone on long enough”, adding that Labour should make it easier for people to improve the energy efficiency of their homes.
Last week, Cornwall Insights’ principal consultant Craig Lowrey said: “It might be tempting to look at rising bills and conclude that the push towards renewables is not working, and we should scale back on the transition.
“But the reality is higher energy costs only reinforce the need to accelerate our expansion of clean, reliable energy across the UK.”
