Energy bills projected to fall by less than expected this summer and autumn, says research firm | Business News
Energy bills are projected to fall by less than expected this summer and autumn due to an increase in wholesale prices, according to a closely-watched forecast.
The energy price cap projection in both quarters – July to September and October to December – has risen by around 7% since predictions made last month.
This means the summer quarter prediction increases from £1,465 a year to £1,559 for the average user, research firm Cornwall Insight said.
The October to December forecast has risen from £1,524 to £1,631.
A marginal increase is expected in January next year, bringing the cap to £1,634 for a typical consumer.
The shifts are blamed on wholesale energy prices, which have rebounded slightly from their 30-month low earlier this year.
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Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “While no household will want to see forecasts rising, it’s important to recognise that these do still represent a fall from the new cap coming in from April, itself a large drop.
“So there is every reason to remain optimistic for energy bills moving forward.
“However, with both Ofgem and the government seeking views on the future of the default tariff cap and consumer protection in general, it is apparent that we need an enduring solution to the challenge of energy bills that remain hundreds of pounds above the levels we saw prior to the energy crisis.”
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The energy regulator Ofgem puts a cap on the amount that energy providers can charge per unit of power every three months.
Its price cap for the summer quarter will be announced by 24 May, a few weeks after the deadline for its consultation on the future of the cap.
Options presented in Ofgem’s discussion paper include a price cap that takes time-of-use or vulnerability into account, with protection such as capping the margin suppliers can make.
