Householders look set to face energy bills as high as £4,266 next year according to Cornwall Insight and reported by the BBC.
This means the average household would be paying £355 a month – at the moment, the average household energy bill is £164 a month.
In the report, Cornwall said that the revised average cost was a result of Ofgem’s decision to change the price cap every three months instead of six, coupled with higher wholesale prices. However, Ofgem has said no forecast for next year could be “robust” at this stage and had “limited value”.
The next price cap is due to be announced at the end of this month. According to the report, Cornwall expects this to rise to £3,582 a year, compared to Ofgem’s prediction of £2,800.
The Government has said there are no plans to intervene until a new prime minister is in place though a package of measures worth £15bn was announced earlier this year to ease the cost-of-living crisis. Part of the package is a £400 discount on energy bills for all householders (£650 for the poorest householders to help meet wider living costs).
The Bank of England recently forecasted a recession, with inflation set to hit 13%.
Announcing the increase of the Bank Rate to 1.75%, the Bank of England stated:
“Inflationary pressures in the United Kingdom and the rest of Europe have intensified significantly since the May Monetary Policy Report and the MPC’s previous meeting. That largely reflects a near doubling in wholesale gas prices since May, owing to Russia’s restriction of gas supplies to Europe and the risk of further curbs. As this feeds through to retail energy prices, it will exacerbate the fall in real incomes for UK households and further increase UK CPI inflation in the near term. CPI inflation is expected to rise more than forecast in the May Report, from 9.4% in June to just over 13% in 2022 Q4, and to remain at very elevated levels throughout much of 2023, before falling to the 2% target two years ahead.”
