‘Genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s’
The cost of living crisis looks set to get worse, with the UK’s energy cap expected to rise in October to around £2,800.
Ofgem’s chief executive Jonathan Brearley said Tuesday that energy costs could rise by £829.
The cap which applies until 31 September is £1,971 a year, but Brearley told the Business, Energy and Industrial Strategy Committee that in October it will be “in the region of £2,800”, according to a report by Sky News.
Brearly blamed continued volatility in the gas market for the possible jump, saying “conditions have worsened in the global gas market, with Russia’s invasion of Ukraine”.
“Gas prices are higher and highly volatile. At times they have now reached over 10 times their normal level,” he said.
By my reckoning, a £2,800 price cap would take energy bills to the highest level as a proportion of household spending since comparable records began in the 1950s https://t.co/QWCkc6kIeO pic.twitter.com/w9BxrEjVk5
— Ed Conway (@EdConwaySky) May 24, 2022
Ofgem's prediction of the price cap hitting £2,800 in October is absolutely devastating.
Here's a simple chart to show you how completely out of control energy bills are at the moment. pic.twitter.com/dPDvEjowTQ
— Nadine Batchelor-Hunt (@nadinebh_) May 24, 2022
The Ofgem Chief Exec has told MPs the price cap will rise c42% in Oct putting typical use to £2,800/yr. I'm glad he's been open about this, I asked last week for them to publish forward guidance.
This is higher than analysts predictions of £2,600 (both bloody awful though)
— Martin Lewis (@MartinSLewis) May 24, 2022
More than double the price cap (£1,277) in October 2021.
A reminder that the 2019 Tory Manifesto said: "We will keep our existing energy cap and introduce new measures to lower bills." https://t.co/1Y9bzexnaj
— Jo Maugham (@JolyonMaugham) May 24, 2022
Brearly acknowledged it was “a very distressing time” for consumers but said he had to be “clear with this committed, with customers, and with the government”.
He said later Tuesday he would write to Chancellor Rishi Sunak to provide him with our latest estimate of the price cap uplift.
“This is uncertain, we’re only part-way through the price cap window, but we’re expecting a price cap in October in the region of £2,800,” Brearly said.
Brearley described the current situation as “genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s”.
The news comes as the UK is already struggling to cope amid rising taxes, fuel, and food prices.
Martin Lewis tweeted that he was “glad” Ofgem had been open about the rise, even though it was “bloody awful”.
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