Domestic energy prices are expected to edge up again in the New Year, according to consultancy Cornwall Insight. A household using a typical amount of gas and electricity will pay £1,736 a year from January, according to the forecaster, which is widely regarded for its accurate predictions.
That would be a £19 a year rise, or a 1% increase, compared with the current typical annual bill of £1,717, with prices forecast to stay high for the rest of winter.
Energy regulator Ofgem will announce the next official quarterly price cap on Friday, with some charities concerned about how less well-off households and pensioners will cope during the colder months.The energy cap limits the maximum price that can be charged for each unit of gas and electricity, rather than the total bill.
This means people in larger properties will tend to pay more overall owing to higher energy usage, and those in smaller properties tend to pay less.
The energy watchdog Ofgem’s price cap affects 29 million households in England, Wales and Scotland. Different rules apply in Northern Ireland.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said that while bills will remain “largely unchanged” from October, the news that prices will not drop after rises were seen in the Autumn will still be “disappointing” for many.
Energy prices forecast
“What we’ve been looking at were prices well above the historic norms,” he told the BBC’s Today programme. He added that there “doesn’t seem to be any sign of a return to pre-energy crisis levels,” referring to the spike in costs seen when conflict between Russia and Ukraine broke out.
The consultancy also expects that prices will remain higher due to geopolitical tensions, bad weather and maintenance taking place on Norwegian gas infrastructure.
The market is still “very sensitive” to global events, it said, with higher prices likely to be “the new normal”.
Peter Smith, director of policy at the National Energy Action charity, said that many people were already “rationing their energy use” or building up debt to try to keep warm.
“With increased wholesale prices in the last few months, there won’t be any let up in the unaffordable cost of energy,” he said.
Source: BBC
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