UK

Energy bills expected to hit £4,200 in January, according to dire new forecast

Energy bills are expected to rise even further this winter than previously forecast, according to the latest from energy consultancy Cornwall Insight.

Bills are now expected to reach approximately £3,582 a year for the average household from October – up from the £3,359 predicted earlier this month.

From January, the amount is expected to rise to £4,266 before continuing to rise in April to £4,427 – the previous forecast was for £3,729 in April.

The analysts blamed the change on the increase in wholesale prices since the last forecast, and an expected change in methodology for calculating the energy price cap.

Dr Craig Lowrey, principal consultant at Cornwall Insight, described the increase of more than £650 in the January prediction as a “fresh shock”.

“The cost of living crisis was already top of the news agenda as more and more people face fuel poverty, this will only compound the concerns.”

He said the change in how the price cap is calculated was necessary to prevent suppliers going bust, but added: “Rather than critiquing the methodology of the cap, it may be time to consider the cap’s place altogether.

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“After all, if it is not controlling consumer prices, and is damaging suppliers’ business models, we must wonder if it is fit for purpose – especially in these times of unprecedented energy market conditions.

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“It is essential that the government use our predictions to spur on a review of the support package being offered to consumers.

“If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now.”

He added: “Right now, the current price cap is not working for consumers, suppliers, or the economy.”

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