New £1,782 energy bills warning as millions face higher prices

A third hike in energy bills within six months is looming, with experts forecasting another increase come April. The industry regulator Ofgem raised the price cap by 10 percent in October, equating to an annual rise of £149 for a typical household, bringing it to £1,717.

This figure is set to climb to £1,738 from January 1st. Now, analysts at Cornwall Insight predict that this will further increase to £1,762 per annum from April 1st through to early July, due to rising wholesale gas prices and changes in how the cap is calculated.

The UK, heavily reliant on imported gas for household heating and electricity generation, suffers the highest power prices globally, causing significant strain on households and businesses. These latest price cap predictions indicate that British families will be paying around 50 percent more than before the energy price crisis triggered by Russia's invasion of Ukraine and unrest in the Middle East.

Other potential reforms to the price cap, such as incorporating allowances to fund exemptions for energy-intensive industries, could push the cap up by an additional £20 to £1,782, according to Cornwall. European gas prices have surged near a 12-month high, trading at €45.5 per megawatt/hour, up from a 30-month low of €24 per MWh in February.

Increased demand from Asia following summer heatwaves has intensified international competition for supplies. Concurrently, Britain has become increasingly dependent on liquefied natural gas imports as it.

The UK has been trying to reduce its reliance on Russian pipeline supplies since the Ukraine invasion. Ofgem suggests that this situation could likely lead to continued volatility in gas prices next year.

Craig Lowrey, a principal consultant at Cornwall Insight, commented that energy bills for the coming year are "shaping up to reflect a perfect storm of regulatory changes and market turbulence", along with potential reforms proposed by the new government. He added: "There are a lot of unknowns, and while significant rises in price are currently unlikely, the scale of any increases will depend on how the market and the reforms unfold."

Simon Francis, coordinator of the End Fuel Poverty Coalition, expressed concern saying: "The latest forecast price cap rise will mean energy bills will be 70 per cent above what they were in winter 2020/21 — that’s more than £750 extra a year the average household has to find just to use similar levels of energy as a few winters ago. This means more people living in cold damp homes, exposed to the health complications that come from living in fuel poverty."

Ben Gallizzi, an energy expert at Uswitch.com, warned: "This predicted rise in April’s price cap would mark a third consecutive hike for energy prices, adding to the current pain for households. This increase could mean the average household on a standard variable tariff would pay 1 percent more on their rates from April – on top of the 1 percent increase in January that we’re yet to pay. This is an early prediction so this 1 percent rise."

While energy prices remain uncertain, he advised households on how to safeguard themselves. He said: "There are now a range of fixed deals available that are significantly cheaper than the predicted price cap for January, so it is well worth running a comparison to see how much you could save. "Right now, the average household could save up to £112 per year against the current price cap by switching to a twelve month fixed deal.

"Consumers who are worried about paying their energy bill should check what energy help they are eligible for, and contact their supplier who may be able to offer support."