UK energy bills to rise from January despite expert predictions

The regulator said wholesale prices were currently stable but that conditions remained ‘volatile’ (Andrew Matthews/PA) Andrew Matthews

Household energy bills will rise by 0.2% from January 1 after the regulator Ofgem increased its price cap. The average dual-fuel household in England, Scotland and Wales will pay about 28 pence more per month.

This brings the average annual bill to £1,758 for those on a default tariff, up from the current £1,755. The increase comes as an unexpected development after energy experts at Cornwall Insight had predicted prices would fall by 1%.

Ofgem said wholesale energy prices have fallen by 4% over the past three months and remain currently stable. However, the regulator warned that conditions in the energy market continue to be volatile.

Price Cap Protection

Tim Jarvis, director general of markets for Ofgem, acknowledged that consumers may struggle to feel the benefits of falling prices. «While energy prices have fallen in real terms over the past two years, we know people may not be feeling it in their pockets,» he said.

He emphasized that the price cap serves as a safety net against overpaying. «But it's only a safety net and there are practical ways that customers can pay less for their energy,» Jarvis added. He pointed out that wholesale costs still make up the largest portion of bills, leaving households exposed to price volatility.

Note: This article was created with Artificial Intelligence (AI).