Energy bills forecast to drop by more than £800 from July

World News

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Average bills for a typical household will drop to £2,165 a year from July, as the Ofgem price cap falls, according to a forecast by Investec.

The drop in prices comes as European natural gas prices have decreased to their lowest levels in 18 months, reports The Telegraph.

Investec is predicting energy bills will go up slightly from October, with average bills going up to £2,190 a year.

The group has also calculated the Ofgem price cap, which currently works out at £4,279 a year in average bills, will decrease to £3,332 in April.

This means the Government will pay £332 for the average household with the new guarantee at £3,000 a year, based on typical use.

Britons in England, Scotland and Wales will see their bills go up by an additional amount in April as the final monthly instalment of the £400 energy bills discount goes out in March.

Previous figures from Cornwall Insight predicted energy bills would fall to around £2,200 a year from July, and would stay at this level until the end of the year.

The group said: “Our forecasts show prices in the second half of 2023 remaining below the Energy Price Guarantee (EPG) level, and therefore will not cost the Government any money from July.

“With wholesale prices still well above pre-pandemic levels, the lower cost of the scheme is likely to spark conversation on the additional energy bill support the Government may now be able to offer households.”

However, the experts at Cornwall Insight warned due to current market volatility, average bills from July could range anywhere between £2,421 and £1,981 in July.

The analysts said: “While the energy market outlook has improved markedly from last year, with a mild winter and higher storage levels in Europe causing substantial falls in wholesale rates, prices remain very volatile.

“The price cap setting for beyond the summer of 2023 is still a fair distance away, and we would expect wholesale prices to move daily before those cap levels are set, so any forecasts should be viewed in that context.”

Jack Roberts, CEO of SlothMove, told the predicted decrease in energy bills may not make a huge difference as people face mounting pressure with the rising cost of living.

He said: “Even if energy bills fall, it may not make a substantial difference for consumers due to the other pressures of the rising cost of living.

“Energy bills are a key mix of the household, representing around 10 percent of typical household income in the UK at the moment.

“The increased inflationary pressure on fuel and other commodities would still apply pressure to the average household’s budget.

Prices are continuing to increase for everyday essentials, with the rate of inflation currently at 10.1 percent.

Millions of Britons are to get additional cost of living support from April including a £900 cost of living payment going out to people on certain means-tested benefits, including Universal Credit.

The payment will be made in three instalments over the coming financial year with the first payment in Spring 2023.

Pensioners are also to receive a £300 payment and there will be £150 for disabled Britons to help towards their additional costs.

The state pension is also to get a 10.1 percent boost in April, along with many benefit payments, including Universal Credit, PIP and Pension Credit.

More to follow…

Source: Read Full Article