Energy bills are set to rise (Image: Getty)
Millions of households will today receive the latest update on their soaring energy bills, with a rise anticipated to strike in April. Ofgem, the gas and electricity regulator, is poised on Tuesday to unveil the new energy price cap that will apply from April through to July—a hike already tipped by analysts to push bills up roughly 5% from current levels.
Last week’s projections by Cornwall Insight sparked concerns among bill payers as they suggest the typical annual household energy bill could escalate by around £85 to £1,823. The looming increase has been linked to Europe’s surging gas prices, driven largely by depleted gas storage levels continent-wide.
Ofgem’s energy price cap constitutes the maximum per-unit charge enforceable by energy firms across England, Scotland and Wales. This cap is reviewed quarterly by Ofgem, meaning costs can fluctuate four times a year.
Even though higher rates seem inevitable, the silver lining lies in usage—households typically consume less energy during the milder spring and summer, potentially offsetting some of the cost despite an increased rate per unit.
Yet another spike in the price cap represents the third consecutive quarter of painful increases for consumers, undermining Labour’s election vow to slash energy bills “up to £300 by 2030”.
The UK Government has recently embarked on a significant drive towards wind and solar energy to reduce the country’s reliance on global gas prices. While experts believe this will likely make energy more affordable in the long run, campaigners are urging ministers to provide immediate assistance for those struggling with bills next winter.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, expressed that high power prices have “gone on long enough”, and suggested that Labour should facilitate improvements in home energy efficiency.
Last week, Craig Lowrey, principal consultant at Cornwall Insight, said: “It might be tempting to look at rising bills and conclude that the push towards renewables is not working and we should scale back on the transition. But the reality is higher energy costs only reinforce the need to accelerate our expansion of clean, reliable energy across the UK.”