Energy price cap predicted to fall in October

Annual energy bills for a typical household are expected to fall at least £150 from October, according to new figures from Cornwall Insight.

The research suggests that he energy price cap will drop to £1,925 when announced by regulator Ofgem next week, down from £2,074 for the current period, from July to September.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight said “While a small decrease in October’s bills is to be welcomed, we once again see energy price forecasts far above pre-crisis levels, underscoring the limitations of the price cap as a tool for supporting households with their energy bills. As many, including energy regulator Ofgem have acknowledged, it is essential that the government explore alternative solutions, such as social tariffs, to ensure stability and affordability for consumers.”

“This slow reduction in bills, coupled with the volatility associated with the price cap, has seen many consumers taking advantage of the return of fixed price tariffs. Such an option is a two-sided coin, while many find comfort in locking in energy prices after the turbulent bills of the past couple of years, the potential for the price cap to dip below fixed rates is also worthy of consideration. With so many unknowns in the energy market, each household must decide for themselves what is the best avenue for them.”

“Looking ahead to next year, we see how events on the other side of the globe have impacted gas prices and our subsequent price cap predictions. In the same way as we saw wholesale market volatility impact our cap forecasts last year, similar developments risk causing sharp changes in household bills in 2024.”

“The UK’s structural reliance on gas imports means that it is highly susceptible to fluctuations in the international wholesale energy market. This situation continues to highlight the need for an energy policy that can accommodate the practicalities of a global energy market with support for domestically sourced, sustainable supplies which can help bring stable energy prices for all households.”