Ofgem energy price cap: prices forecast to rise by almost £100, adding pressure on households - predictions

• Household energy bills are predicted to rise by 5%, or £85, to £1,823 in April
• The increase is driven by higher wholesale gas prices across Europe
• It marks the third consecutive price rise, adding financial pressure on households
• Ofgem will confirm the new price cap for April to June on February 25
• Government support schemes are available to help vulnerable households manage costs

Household energy bills are expected to increase again in April, according to a forecast from energy consultancy Cornwall Insight.

The firm predicts that regulator Ofgem will announce a 5% rise in the average household energy bill, equating to an £85 increase to £1,823.

Craig Lowrey, principal consultant at Cornwall Insight, said: “Households have been hit hard over the past few months, and with bills set to rise for a third consecutive time the pressure is not letting up.”

Lowrey explained that the increase is driven by rising wholesale gas prices across Europe. He said that this highlights the importance of Labour’s push to expand UK-based renewable energy sources, like wind and solar farms.

Ofgem adjusts the price cap for households every three months, primarily reflecting changes in wholesale energy prices. The regulator is set to confirm the cap for April to June on Tuesday February 25.

The government introduced the energy price cap in January 2019, setting a maximum price that energy suppliers can charge consumers in England, Scotland, and Wales for each kilowatt hour (kWh) of energy used.

It doesn’t cap total bills, as households still pay for the amount of energy they consume. The cap is much lower than during the peak of the energy crisis, which was driven by Russia’s invasion of Ukraine in February 2022.

But prices are still “more volatile than it has been in quite some time, and households are bearing the brunt of cold weather and low gas storage levels across Europe,” Lowrey said.

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The news is another blow to households already struggling with rising living costs. As energy bills increase again, many people are already facing financial pressure due to other rising costs, such as groceries, rent, and fuel.

The increase in energy prices means that more families will have to allocate a larger portion of their budgets to keeping the lights on and heating their homes, which may leave less money for other essentials.

With energy bills set to rise once again, we want to hear from you. How are these price increases affecting your household, and what steps are you taking to manage the impact? Share any tips for others in the comments section.