Household energy prices are expected to fall later this year - Manchester Evening News

Household energy prices are expected to fall later this year - Manchester Evening News

Households could pay less for their energy bills by the end of the autumn, according to new predictions.

Ofgem is set to announce its new price cap on Friday, which energy consultancy firm Cornwall Insight states will dip to £1,925. This would result in a 7 per cent reduction and would be the lowest cap since March 2022.

However, experts have warned that the figure could mislead many billpayers. It's important to note that the cap is not a wide-reaching maximum payment on bills, but dictates the maximum that is paid per unit of energy.

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Therefore, those who use less will pay less but those who use more will pay more. Despite this, Ofgem recently reduced how much it assumes the average household uses which could reduce the price cap even further to £1,823.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “While a small decrease in October’s bills is to be welcomed, we once again see energy price forecasts far above pre-crisis levels, underscoring the limitations of the price cap as a tool for supporting households with their energy bills.

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“As many, including energy regulator Ofgem have acknowledged, it is essential that the Government explore alternative solutions, such as social tariffs, to ensure stability and affordability for consumers.”

He added: “Looking ahead to next year, we see how events on the other side of the globe have impacted gas prices and our subsequent price cap predictions. In the same way as we saw wholesale market volatility impact our cap forecasts last year, similar developments risk causing sharp changes in household bills in 2024.

“The UK’s structural reliance on gas imports means that it is highly susceptible to fluctuations in the international wholesale energy market. This situation continues to highlight the need for an energy policy that can accommodate the practicalities of a global energy market with support for domestically sourced, sustainable supplies which can help bring stable energy prices for all households.”