Home / Business and Economy / Energy Bills to Rise 1% in October as Ofgem Updates Price Cap
Energy Bills to Rise 1% in October as Ofgem Updates Price Cap
27 Aug
Summary
- Typical household energy bill to increase by £17 to £1,737 per year
- Warm Home Discount scheme expansion to add £15 to bills
- Wholesale energy prices remain volatile due to geopolitical factors
According to the latest forecast, households in the UK are set to face a rise in their energy bills of around 1% in October when the energy regulator Ofgem updates its price cap. Experts at Cornwall Insight predict that the typical annual energy bill will increase by £17 to £1,737.
This turnaround from the previous forecast in July, which had suggested a 1% drop in bills, is largely due to changes Ofgem is expected to introduce in the upcoming cap period. These include the expansion of the Warm Home Discount scheme for vulnerable households, which is set to add around £15 to a typical bill, while also providing £150 in support to 2.7 million additional people.
However, the forecast also notes that wholesale prices for electricity and gas have been "volatile", largely reflecting geopolitical factors, including uncertainty over US trade policy. While Cornwall Insight expects a small drop in the price cap in January, this is dependent on various factors, including further geopolitical developments, weather patterns, and changes to policy costs.
Dr. Craig Lowrey, a principal consultant at Cornwall Insight, acknowledged that the news of higher bills will not be welcomed by households, especially as winter approaches. He emphasized that the price cap reflects more than just the market price of energy, and that the current challenge underscores the broader uncertainty facing millions of households.
