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Household energy bills across Great Britain are set to rise at the start of next year, analysts predict, putting more pressure on household finances.
Officially, the price cap for January-March 2025 will be set on Friday morning by regulator Ofgem, limiting what energy providers can charge in England, Scotland and Wales.
But analysts at Cornwall Insight have crunched the numbers, and predict that the cap for a typical dual fuel household will rise to £1,736 per annum in January, up from the current level of £1,717 per year set in October.
This is a rise of 1% from the current price cap – a blow to hopes that bills might drop at the start of 2025.
Importantly, though, the cap limits the amount that a consumer can be charged for each unit of energy – not a ceiling on potential bills, which are usually higher in the winter as households spend more to keep warm.
Cornwall Insight, whose calculations are based on the wholesale price of energy, says: "The cap level is a reflection of a relatively volatile wholesale market, influenced by supply concerns tied to geopolitical tensions, maintenance on Norwegian gas infrastructure, weather disruptions, amongst other smaller factors.
"Despite prices stabilising in comparison to the past two years, the market remains very sensitive to global events. This is leaving prices substantially above historic averages."
At the end of September, Cornwall had expected the price cap would dip in January, but wholesale energy prices have been higher than hoped.
Last Friday, the month-ahead price of UK gas rose to a one-year high of almost 120p per therm.
Gas prices rose last week, after Austrian group OMV warned of a potential disruption to supplies from Russia. On Saturday, Gazprom did indeed stop supplies to Austria, after OMV won a €230m arbitration award against Russia’s state-owned natural gas company.
Looking further ahead, Cornwall currently forecast the cap will drop slightly in April 2025 and again in October 2025.
The agenda
• 8am GMT: Bundesbank president Joachim Nagel gives speech
• 10am GMT: Eurozone trade balance for September
• 3pm GMT: US Nahb housing market index
We’ll be tracking all the main events throughout the day ... |
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