Energy price cap expected to rise by 9% in October

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Energy price cap expected to rise by 9% in October

Domestic energy prices are expected to rise in the run-up to winter, according to consultancy Cornwall Insight.

The forecaster, which is widely regarded for its accurate predictions, said a household using a typical amount of gas and electricity would pay £1,714 a year from October.

That compares with a current annual bill of £1,568, the lowest for two years.

Energy regulator Ofgem will announce the next official quarterly price cap on Friday, with charities concerned about the prospect of prices rising again.

Although the price cap is changed every three months, it is illustrated by Ofgem in terms of an annual bill for a household using a typical amount of gas and electricity.

People in larger properties will tend to pay more overall owing to higher energy usage, and those in smaller properties will pay less.

That is because the cap limits the maximum price that can be charged for each unit of gas and electricity, rather than the total bill.

It affects 28 million households in England, Wales and Scotland. The sector is regulated separately in Northern Ireland.

With prices set to rise, some billpayers might look at the options available to fix their energy tariff.

Cornwall Insight said that the average saving from the top 10 cheapest tariffs on the market in August was only £5 a year, compared with a default tariff set by the price cap.

That may change in the coming weeks, and Richard Neudegg, from price comparison website Uswitch, said there were options for those who wanted certainty.

“Just because it is a fix, it doesn’t mean it is a good price fix,” he said.

“The question for consumers is, if they want that level of certainty, how cheaply can they get it.”

Standing charges, a fixed daily fee covering the costs of connecting to a supply, currently stand at at 60p a day for electricity and 31p a day for gas, although they vary by region.

Ofgem is currently considering whether to change the standing charge billing system.

Energy bills are considerably lower than the peak after Russia’s invasion of Ukraine, when the government stepped in to limit bill rises, but are much higher than before the pandemic.

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