No expiry date for energy price hikes this winter
Research from Cornwall Insights has warned British households that the average dual-fuel bill is estimated to rise to over £1,700 a year.
It seems recently households have only just started to relax as inflation and interest rates have started to come down. However, research from Cornwall Insights – a well-respected energy consultancy – shows otherwise. From early 2025 the price cap for Great Britain is forecast to rise to £1,736 a year for the average dual-fuse bill.
The price cap is set quarterly by Ofgem and outlines how much suppliers can charge customers for gas and electricity. The headline rate of £1,736 signals this is how much households would pay in a year, but some can spend more or less depending on how much they use.
Cornwall have theorised that prices will begin to drop in April 2025 and again in October but warned ‘higher prices are likely the new normal’.
Ofgem, the leading energy regulator, is expected to announce the latest quarterly cap for January on Friday – the same day the UK enters heating season.
Craig Lowrey, a principal consultant at Cornwall Insights, said: ‘Our final price cap forecast for January indicates, as expected, bills will remain largely unchanged from October. Supply concerns have kept the market as volatile as earlier in the year, and additional charges have remained relatively stable, so prices have stayed flat.
‘While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.’
Against this backdrop, Cornwall have suggested that the best way to reduce dependence on volatile global energy markets was to build renewables infrastructure in the UK, though this does come with implications, including cost.
Lowery remarked: ‘Although the transition does require upfront investment, it promises lower bills down the line.
‘The government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now. Inaction is a choice to leave people in the cold.’
Echoing a similar tone, Richard Neudegg, director of regulation at Uswitch, said: ‘Predictions that energy prices for those still on default tariffs will rise again in January are another kick in the teeth for households.
‘The price cap is supposed to protect consumers, but millions face paying more during the coldest months of the year.’
News of the energy hike has come as more households than ever in the UK are struggling to afford their bill. Figures from Citizens Advice show 5.3 million people currently live in households in debt to their supplier. What’s more, 800,000 people went more than 24 hours without gas or electricity in 2023 because they couldn’t afford to top up their metre.
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