Energy Price Cap Fall Will Take Just £150 Off Average Bills From October, Experts Forecast

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Energy value headdress autumn will return conscionable £150 disconnected mean bills from October, experts forecast

  • Gas and energy costs for millions could dip from October, analysts say
  • But this could conscionable beryllium a little respite earlier costs commencement to emergence again adjacent year

By Sam Barker Published: 07:51 EDT, 18 August 2023 | Updated: 07:56 EDT, 18 August 2023

The mean family power measure is group to autumn by conscionable £149 successful existent terms, offering constricted respite for Britons struggling pinch precocious state and energy costs.

Energy analysts astatine Cornwall Insight person forecast nan value headdress connected power bills will autumn to £1,823 from October, down £250 a twelvemonth from the existent £2,074 power value cap.

The value headdress is group by regulator Ofgem and dictates nan value paid by much than 80 per cent of UK households that are connected variable-rate tariffs and paying by nonstop debit.

However, successful existent position nan emblematic power measure will autumn by £149, not £250. This is because from October Ofgem will alteration its sums for really it useful retired nan mean power measure that Cornwall Insight is trying to predict.

The power regulator useful retired what nan mean price-capped power measure is by utilizing what it thinks are normal amounts of energy and state for a location to consume.

Glimmer of hope: Energy bills are group to fall, but only slightly, if Cornwall Insight is correct

Since nan commencement of nan pandemic, Ofgem has assumed a normal location uses 2,900 kWh a twelvemonth for energy and 12,500 kWh for gas.

From October 2023 those figures will autumn to 2,700 kWh and 11,500 kWh, respectively, arsenic Ofgem says nan emblematic location uses little powerfulness than it first thought.

Because Ofgem thinks we will usage little power, nan emblematic mean measure is group to autumn further than it would otherwise.

Without nan caller assumptions nan mean measure would beryllium £1,925, aliases £149 little than currently.

The value headdress changes 4 times a year. After October 2023 nan adjacent alteration will beryllium successful January 2024.

Worked retired utilizing Ofgem's existent power usage assumptions, Cornwall Insight predicts mean power bills will emergence to £2,082 successful January 2024, autumn to £2,014 successful April past autumn further to £1,965 adjacent October.

Using nan caller assumptions, emblematic power bills will autumn to £1,823 successful October 2023, past emergence to £1,979 successful January, driblet to £1,915 successful April and past autumn to £1,867 successful October 2024 - if Cornwall Insight's predictions are correct.

Energy bills are group to emergence again owed to spikes successful state prices, Cornwall Insight said. 

The patient has predicted each erstwhile value headdress movements reasonably accurately.

Uswitch power master Nathalie Mathie said: 'If nan headdress is confirmed astatine this level, past nan value of power for nan mean family will beryllium 7 per cent little during October, November and December — but these are immoderate of nan coldest months of nan twelvemonth and erstwhile households usage much energy.

'Despite different driblet successful rates, bills are still precocious erstwhile compared to pre-crisis levels, truthful households will still request to beryllium mindful of their power usage complete winter.'

Ofgem is announcing nan nonstop figures for nan October value headdress connected August 25. 

Craig Lowrey, main advisor astatine Cornwall Insight said: 'While a mini alteration successful October’s bills is to beryllium welcomed, we erstwhile again spot power value forecasts acold supra pre-crisis levels, underscoring nan limitations of nan value headdress arsenic a instrumentality for supporting households pinch their power bills.

'As many, including power regulator Ofgem person acknowledged, it is basal that nan authorities research replacement solutions, specified arsenic societal tariffs, to guarantee stableness and affordability for consumers.'

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