(qlmbusinessnews.com Tues. 20th Aug, 2024) London, UK —
“Cornwall Insight Predicts 9% Energy Price Increase for UK Households This Autumn”
Households across the UK are bracing for a rise in energy bills this autumn, with experts predicting a 9% increase starting in October. According to Cornwall Insight, a consultancy known for its accurate forecasts, the average household could see annual energy costs climb to £1,714, up from the current £1,568—a rise of £146 per year.
The upcoming increase will be reflected in the new energy price cap, which is set to be announced by the regulator Ofgem this Friday. The price cap, adjusted quarterly, limits the maximum price suppliers can charge for each unit of gas and electricity. While it is designed to protect consumers, it does not cap the total bill, meaning larger households may face even steeper costs.
This forecasted rise comes as wholesale energy prices have surged by approximately 20% in recent months, driven by global market instability. These costs are passed on to consumers, making up about half of the charges seen on their energy bills.
As winter approaches, the prospect of higher energy bills is raising concerns among charities and consumer groups. National Energy Action, a leading charity, has warned that any increase in costs, combined with reduced government support, could push many households to the financial brink.
Amidst this uncertainty, some consumers may consider locking in their energy rates with a fixed tariff. However, Cornwall Insight noted that the potential savings from switching to one of the top 10 cheapest tariffs in August amounted to just £5 annually compared to the standard variable rate set by the price cap. Richard Neudegg from Uswitch advised caution, stating that not all fixed-rate deals are beneficial, and consumers need to weigh the certainty of a fixed rate against the potential cost.
Looking further ahead, Cornwall Insight has also predicted that energy prices may rise again during the winter, with a modest increase expected when the January price cap is announced. However, they cautioned that ongoing geopolitical tensions, particularly in the Russia-Ukraine conflict, could lead to further price hikes.
Despite prices being significantly lower than during the peak following Russia’s invasion of Ukraine, they remain much higher than pre-pandemic levels. Standing charges, which cover the cost of maintaining energy supplies, are currently around 60p per day for electricity and 31p per day for gas, though these rates vary by region. Ofgem is currently reviewing the standing charge billing system to determine if changes are necessary.
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