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Household gas and electricity bills in Britain are set to rise this winter after regulator Ofgem said it would lift the energy price cap by 10 per cent following an increase in wholesale costs.
Ofgem has set the cap for the period between October and December at a level that will mean a typical household pays £1,717 a year, compared with £1,568 a year now.
Friday’s decision is the first time the regulator has raised the cap since January and means bills remain hundreds of pounds higher than before the energy crisis fuelled by Russia’s full-scale invasion of Ukraine in February 2022.
It comes after chancellor Rachel Reeves last month announced a £1.5bn cut to winter fuel payments for better-off pensioners as part of emergency savings to fill in a £22bn fiscal hole she claims she inherited from the Conservatives.
Jonathan Brearley, chief executive of Ofgem, said: “We know that this rise in the price cap is going to be extremely difficult for many households.
“Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.”
Mike Thornton, chief executive of consultancy the Energy Saving Trust, urged the government to address “persistently high energy prices” including through energy efficiency measures.
Mathew Lawrence, director at think-tank Common Wealth, said the rise was “a brutal reminder that the cost of living crisis is inseparable from our continued reliance on volatile global fossil fuel markets”.
The price cap, introduced in 2019, sets a limit on how much energy companies can charge homes on default tariffs per unit of gas and electricity consumed. It is reset every three months to reflect changes in wholesale prices, and dictates bills for 27mn households.
Before winter 2021, Ofgem set the cap at levels that meant typical households paid less than £1,100 a year.
But the average bill hit a record high of £4,059 in January last year as wholesale prices surged after Russia’s invasion, forcing the previous Conservative government to launch a subsidy scheme.
This is a developing story
