Big Drop in Energy Bills Predicted for Summer
Respected energy consultants Cornwall Insight have predicted a significant decrease in the typical household’s energy bill starting from July. This anticipated reduction will see the average annual energy cost drop to £1,560, which is over £100 less than the upcoming price cap set at £1,690. However, it’s essential to note that this latest forecast is approximately 7% higher than the previous prediction made about a month ago.
Energy bills reduction
The price cap adjustments are made every quarter by Ofgem, primarily based on various factors, with wholesale energy prices being a significant determinant. Although wholesale prices recently hit a 25-year low, there has been a slight increase in recent weeks. It’s crucial to understand that the price cap does not limit the total energy bills for households; the figures provided are an average for a typical household’s usage.
Cornwall Insight’s principal consultant, Dr. Craig Lowrey, highlighted the market’s stabilization following the recent drop in wholesale prices. He mentioned that while the forecasted rise might not be welcomed by households, it still represents a decline from the new price cap effective from April.
Uswitch has positively acknowledged this prediction as ‘another step in the right direction’ for households. Energy expert Will Owen advised households to consider fixing their energy prices now, as forecasts suggest a rise in energy prices during the autumn and winter seasons. He emphasized the importance of Ofgem’s steps in reforming the price cap to encourage more competitive pricing and improved customer service from energy suppliers.
Conclusion
The predicted drop in energy bills offers a glimmer of hope for households amidst the current economic climate. While the slight increase in the forecast may raise concerns, it still signifies progress compared to the upcoming price cap. As households navigate through uncertain times, staying informed about energy trends and considering fixed-price options could provide stability and financial relief.
By Laura Wilson
