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Energy bills forecast to remain above £3,350 until at least 2024
2 August 2022, 11:44
Surging gas prices and concerns about Russian supply have been blamed for the predicted increase.
Household energy bills are likely to remain at more than two-and-a-half times their pre-crisis levels until at least 2024, a dire new prediction has warned.
Cornwall Insight, one of the country’s most respected energy consultancies, said bills will hit a staggering £3,359 per year from October for the average household, and not fall below that level until at least the end of next year.
The price cap on energy bills, which regulates what 24 million British households pay, will hit £3,616 from January and rise further to £3,729 from April.
It will begin to fall after that, but only slowly, reaching £3,569 from July before hitting £3,470 for the last three months of 2023.
The latest price cap predictions are hundreds of pounds above previous forecasts from Cornwall Insight, but are slightly lower what another consultancy, BFY, has predicted.
In May, the Government announced an energy costs support package – worth £400 per household – in response to predictions that bills would rise to £2,800 for the average household in October.
The package also promised extra support for more vulnerable households.
Last month, Cornwall Insight predicted that annual energy bills would typically rise to £3,244 from October and £3,363 from January, but circumstances have changed significantly since then.
“Customers will be sadly used to these ever-increasing price cap forecasts. We have less than a month until the new price cap is announced and given the trends in the wholesale market and the concerns over Russian supply, unfortunately the only change to the prediction is likely to be up,” said Craig Lowrey, principal consultant at Cornwall Insight.
“While the rise in forecasts for October and January is a pressing concern, it is not only the level but the duration of the rises that makes these new forecasts so devastating.”
Dr Lowrey joined other experts in saying Government support will “only scratch the surface” for households.
“While the government has pledged some support for October’s energy rise, our cap forecast has increased by over £500 since the funding was proposed, and the truth is the £400 pledged will only scratch the surface of this problem.”
He warned that “tinkering with VAT and policy costs will only make a dent in bills.”
On Friday, Richard Neudegg, director of regulation at Uswitch, called for the £400 to be increased to at least £600, and for payments to vulnerable households to rise from £650 to £950.
“The Government did the right thing by stepping in with wide-reaching support to try to help ease the blow. However, this support now looks like a severe under-estimation of what consumers need,” he said.
“Households need clarity to help them plan for the most expensive winter in living memory.”
Charity National Energy Action last month predicted that, should the average bill reach £3,250 per year, 8.2 million UK households, or one in three, will be in fuel poverty.