In a shocking blow to UK households, energy bills are forecast to soar by a staggering 5% from April, pushing costs £85 higher than previously expected. The grim news comes as Europe’s gas storage levels have taken a nosedive, leaving millions of families bracing for yet another financial hit.
Energy Price Cap Set to Skyrocket
The average gas and electricity bill for households across England, Scotland, and Wales is expected to reach an eye-watering £1,823 a year for a typical household under the energy regulator’s price cap. This marks the third consecutive quarterly rise in costs for households, delivering a devastating blow to the government’s promise to bring down energy bills.
According to influential consulting firm Cornwall Insight, the forecast is even more dire than their earlier prediction of a £1,785 annual bill. The culprit? Colder weather and limited renewables have caused gas storage levels to plummet across Europe.
Ofgem to Confirm Price Cap Hike
The energy industry regulator for Great Britain, Ofgem, is set to confirm the figure for the energy price cap covering the three months from 1 April on 25 February. In January, the regulator had already increased the cap by 1.2% to a rate equivalent to £1,738.
About 9m homes that use variable tariffs linked to the price cap will see an immediate impact on their bills from April, while it will be delayed for others on fixed tariffs.
Russian Gas Supply Cuts Add Pressure
To make matters worse, Europe received the last Russian gas sent via Ukraine’s pipelines in the early hours of New Year’s Day after a gas transit deal struck between the countries five years ago came to an end. This has further squeezed supplies and driven up prices.
Government Urged to Act
Ahead of the forecast, Ed Miliband, the energy secretary, wrote an urgent letter to Ofgem saying the price rise means it must move faster to protect consumers. He called on Ofgem’s chief executive, Jonathan Brearley, to set out swifter mitigations to ease the pressure of the “rollercoaster” of global gas markets.
Billpayers need cheaper energy and more stable prices – something that would also contain inflation and boost the economy – renewably powered heat pumps and better insulated homes are the only surefire way to deliver it.
– Doug Parr, Policy Director at Greenpeace UK
Households Facing Financial Strain
The looming price hike is set to put immense pressure on household finances, many of which are already buckling under the weight of soaring inflation and stagnant wages. Families will be forced to make difficult choices between heating and eating, with the most vulnerable at risk of falling into fuel poverty.
- Key Points:
- Energy bills forecast to rise by 5% from April
- Average annual bill to reach £1,823 for typical household
- £85 higher than previous predictions
- Gas storage levels across Europe have plummeted
- Government urged to take swift action to protect consumers
As the clock ticks down to the April price hike, all eyes are on the government and Ofgem to see what measures they will put in place to shield households from the worst of the impact. Without urgent action, millions of families face a bleak future of financial hardship and energy insecurity.
