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Energy bills could soar to staggering £4k next year as experts warn of power cuts
28 July 2022, 00:55 | Updated: 28 July 2022, 01:03
Energy bills could hit almost £4,000 next year as Russia squeezes European gas supplies.
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The average household's energy bill might hit around £500 in January alone, with the cap on bills expected to hit £3,850 between January and April next year - hundreds of pounds more than previous predictions.
The latest forecast from utilities consultancy BFY Group comes after the Kremlin further strangled the flow of gas to Europe.
While the UK gets very little of its gas directly from Russia, the price paid here is determined by what happens across the continent.
More than half of the country could be forced into fuel poverty as a result, with power cuts also expected to be on the cards, experts warned.
Dr Gemma Berwick, a senior consultant at BFY Group, said: "Following further rises in wholesale prices as flows of gas from Russia to Europe via the Nord Stream 1 pipeline drop to 20% of capacity, we now forecast the Ofgem price cap to rise to £3,420 in the fourth quarter of 2022 and £3,850 in the first quarter of 2023.
"This will make the average household bill over £500 for January alone."
If the predictions are correct, it will mean even more pressure on already squeezed households to make ends meet.
The figures show a near-doubling of today's record price cap of £1,971 - already hundreds of pounds more than the previous high.
BFY now believes Ofgem will have to set the earlier October price cap change at £3,420, with another increase expected when the cap is reviewed in January.
It used to be reviewed ever six months, but recent changes mean that there will be a new price cap every three months going forward.
The cap is based on the average cost of energy in the previous months.
A senior manager at BFY Group told the Sun: "The winter 2022 gas price has risen nearly 10-fold since this time last year, and more than double the price of last winter's gas.
"Official figures have an average income of £31,000, this means more than half the country could be pushed into fuel poverty."
Meanwhile, several countries are believed to be drawing up contingency plans to cut gas and electricity use by 15 per cent in a bit to conserve supplies throughout winter.
Ideas include turning off street lights, not heating public swimming pools and shutting down production at major manufacturers.
Although it is still quite soon to predict the January rise, analysts already have most of the data they need to accurately forecast October's change.
The worsening forecasts, and fears that the market is still rising, will put further pressure on the Government to support the most vulnerable households through the energy crisis.
Ministers were forced to act in May by announcing a major package of support for households.
However, at the time, the prediction for October's price cap was just £2,800 - more than £600 lower than the latest forecast.