Household energy bills in Great Britain are predicted to soar by £276 a year for the typical household from January as the impact of the Middle East war continues through the coldest months of winter. The government’s cap on energy prices is poised to jump by 16% to the equivalent of £1,999 for the average annual dual-fuel bill in a further blow to struggling households, according to figures from the leading forecaster Cornwall Insight. The increase for the January to March period is well above the consultancy’s previous prediction of a 9% rise, with analysts blaming the uptick on the recent rise in gas market prices to three-year highs.
It would be the biggest quarterly jump since January 2023, when the energy crisis that followed the full-scale invasion of Ukraine a year earlier was at its height. Craig Lowrey, the principal consultant at Cornwall Insight, said: “These prices are going to hit households hard. January is already a difficult month for many, with cold weather and bank balances still recovering from Christmas, and now they face the biggest price cap rise we’ve seen in four years.” Gas prices in Europe have doubled in recent months as the continent prepares to enter the cooler months with gas stores at their lowest level in 13 years after the US-Israel war on Iran triggered an increase in global market prices.
Buyers have delayed refilling storage facilities after a cold end to last winter, and extra gas power generation during the summer heatwaves, depleted stocks while oil and gas exports from the Gulf remain severely disrupted by threats to tankers passing through the Hormuz and Bab al-Mandab straits. The gloomier outlook for energy bills was published as millions of households brace for energy charges to rise by 4% from Thursday as the quarterly energy bill cap, which is set by the regulator for Great Britain, Ofgem, climbs to its highest level in three years this winter. The unit cost of electricity will rise from 26.11p a kilowatt hour to 26.32p, while gas charges will rise from 7.33p to 7.97p – equivalent to £1,723 a year for a typical home’s gas and electricity use.
However, actual household bills will depend on how much each consumes.
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