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Adrop in domestic gas and electricity prices has now taken effect, but costs are expected to rise again in October, according to a BBC report.
New price cap
Regulator Ofgem’s new price cap for England, Wales and Scotland came into force on July 1, meaning a typical household’s energy bill will fall by £122 a year.
That brings down the bill for a household using a typical amount of gas and electricity to £1,568 a year, the lowest for two years.
But forecasters expect it to rise again in the run-up to winter, more than reversing the latest drop. Leading consultancy Cornwall Insight predicts that a typical household’s annual bill will be back up to £1,723 in October, a £155, or 10%, increase from now.
“Modest falls in summer look set to be wiped out by bigger rises in autumn when people will need to put the heating back on,” said Adam Scorer, chief executive of charity National Energy Action. “Energy remains an unaffordable luxury for the poorest.”
Although the price cap is changed every three months, it is illustrated by Ofgem in terms of an annual bill for a household using a typical amount of gas and electricity.
People in larger properties will tend to pay more overall owing to higher energy usage, and those in smaller properties will pay less. That is because the cap, set by Ofgem, limits the maximum price that can be charged for each unit of gas and electricity – not the total bill.
Prices in N Ireland
It affects the gas and electricity bills of 28 million households, but does not impact customers in Northern Ireland, where the sector is regulated differently but where prices are also falling.
Energy bills are considerably lower than the peak after Russia’s invasion of Ukraine, when the government stepped in to limit bill rises. That has fed through to falls in the general rate of rising prices, known as inflation.
