Brits have to get used to high energy bills until at least October 2023. The dire financial warning comes with calls for the government to do more to help people in the cost of living crisis.
Craig Lowrey, senior consultant at Cornwall Insight, is the expert who predicted the price cap on energy bills will rise from £1,971 to £2,980 in October. Today it was said that the government could do more to support bill payers.
Dr Lowrey and his colleagues believe prices will remain above £2,600 until at least October next year.
“We had the first round of household financial support in April, with the expectation of a £400 payment to come later in the year. Together, these measures will make a dent in the increases we expect, but obviously it will not offset that.
“There is therefore clearly the possibility of asking for additional support from the government as long as these high prices continue, so we cannot rule out additional measures.”
The price cap on energy bills is set to rise by a further £1,000 in early October, according to a new forecast which predicts further misery for households. It is expected to reach around £2,980.63 for the next period – which runs from October to December, Cornwall Insight said.
Currently, it is £1,971 – already a record breaking the previous high of 54%. Analysts used the latest data available to estimate the future price of energy.
Previous recent estimates put the next price cap at £2,800. These predictions were enough for the Chancellor to reveal a multi-billion pound support package.
This included £400 for every household in the country and additional support for millions of the most vulnerable people.
Wholesale energy prices have soared over the past year. The increases were first caused by strong demand as global economies reopened after the pandemic.
Then, Russia’s unprovoked large-scale attack on Ukraine pushed prices up even more. The crisis has reduced the number of energy suppliers on the market to just over 20, while competition has been destroyed.
No supplier is able to offer a price lower than the ceiling level. The price cap is already worse for customers than it has ever been.
For an average household, the price of energy rose from £1,277 to £1,971 in April.
Previously the price was as low as £1,042 in the summer of 2020 – the cheapest since the policy came into effect in 2019.
Cornwall Insight expects the price cap to rise further slightly to £3,003 in January 2023 before falling to £2,758 in April and £2,686 in July. He suggested the high prices are here to stay for some time for UK households.