The energy price cap had fallen ahead of the summer
The average household energy bill is set to rise by almost £150 in October when the new energy price cap comes into effect.
Energy consultancy Cornwall Insights predicts the annual energy bill for a typical household will increase by 9 per cent to £1,714 on October 1, up from £1,568.
This is slightly down on its previous forecast in June that the cap would rise by 9.9 per cent to £1,723.
The price cap had fallen by £122 on July 1 this year.
However, the group warned there is likely to be another “modest” increase in January 2025, and that more increases to the cap are possible due to “recent tensions in the Russia-Ukraine war.”
The new energy price cap for October to December will be announced by energy regulator Ofgem on August 23, ITV News reports.
This is the maximum price that energy suppliers can charge per kilowatt hour (kWh) of energy used by consumers in England, Scotland and Wales.
“This is not the news households want to hear when moving into the colder months,” Craig Lowrey, principal consultant at Cornwall Insight, said.
“Following two consecutive falls in the cap, I’m sure many hoped we were on a steady path back to pre-crisis prices.”
Lowrey warned the energy market is “still highly volatile” and that whilst prices are not expected to return to the extreme highs of 2022, it is “unlikely that bills will return to what was once considered normal.”
“Without significant intervention, this may well be the new normal,” he added.
The energy price cap was introduced in January 2019 and is decided based on several factors, the main one being the price of energy in wholesale markets.
The figures for the cap are calculated based on how much an average household would use in a year. This is not a maximum limit on how much people can pay in a year though, and households who use an above average amount of energy will pay more.
