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Energy Bills: January Drop, April Spike Ahead
18 Nov
Summary
- Energy price cap forecast to fall by £22 in January.
- Standing charges have tripled over the past six years.
- Expert warns of April price rise due to non-energy costs.
Energy price forecasts indicate a modest reduction in the energy price cap for January, with a typical household bill expected to fall by £22. This decrease is attributed to lower wholesale prices, which are now a smaller component of overall energy costs. However, this relief is anticipated to be temporary, as experts predict a subsequent rise in bills starting in April.
The primary driver for the forecasted April increase is not wholesale prices but escalating non-energy costs. These include new levies for infrastructure projects and policy decisions. This trend has already seen energy bill standing charges more than triple since 2019, contributing significantly to household expenses even as wholesale rates have fallen.
With predictions of bills rising by around £75 in April, primarily due to higher standing charges, households face an uncertain outlook. While potential government actions like scrapping VAT on energy could offer some savings, the underlying non-wholesale costs are expected to persist, making enduring lower energy bills unlikely for the foreseeable future.
