Energy price cap 'could reach £5,456 next year', warns harshest forecast ever

Analysts warn that the energy price cap could rise to £5,456 by April 2023.

The recent surge in wholesale gas prices has raised concerns that household costs will be even higher in the New Year.

The price households pay for energy was already expected to rise throughout the year, but the latest warnings for spring 2023 are the most dire yet.

Her Auxilione, a consulting firm, added nearly £200 to his previous estimate after further turmoil in global markets.

They initially predicted that he would rise to 4,650 pounds in January, then surge again in April.

Price caps were previously fixed twice a year, but now he will be set every three months, regulator Ofgem previously announced. 

The current cap of £1,971 is almost certain to approach £3,000 by October, barring dramatic government intervention.

For context, it was just £1,042 through February 2020, before the Covid-19 pandemic aftershocks to economic demand and the Ukraine crisis sent global prices soaring. 

Wholesale gas prices (the rate at which energy suppliers buy gas to sell to their customers) fell steadily over the summer, but have recently risen dramatically as winter approaches.

Commercial buyers face prices £1 per therm (100 cubic feet of gas) higher than just two weeks ago, with electricity bills up £100 per megawatt hour .

Auxolione predicts billings will start to decline again from July 2023, but by next winter they will be thousands of pounds higher than they are today.

Governments are under pressure to do more to help people during what is expected to be a harsh winter for millions of people. 

} Under the previous programme, all bill payers will receive a £400 bill discount for six months from October, providing further support to more vulnerable households.

However, the policy was announced in May when experts thought the price cap would only make him £2,800 in October.

Sir Keir Starmer said he would freeze the cap price at the current rate for six months, costing workers £29 billion.

Neither candidate in the Conservative leadership race supports that approach, but it is under increasing scrutiny as to what it will do to soften the blow to people this winter.

33}

Ofgem will announce a new price cap in the last week of August, which is expected to come into force by October 1st.

Britain will not have a new prime minister until her September 5th. That means Boris Johnson's successor will only have four weeks to develop and enact a winter energy plan.

 Please contact the news his team by emailing webnews@metro.co.uk.

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