Economy · August 2, 2022

The energy bills of British households will be at “devastating” levels until “at least 2024”

Domestic energy bills in Britain will remain at “devastating” levels in 2024 and potentially beyond, analysts predict, adding pressure on the government to provide additional financial aid to cash-strapped households.

Energy consultancy Cornwall Insight has warned that there is little relief in sight for households grappling with rising electricity and gas costs as it predicts that the energy price cap in Britain would likely be remained “significantly” above £ 3,000 on average per year until “at least 2024”.

The group, which has been among the most accurate forecasters of British energy prices, estimates that the cap will reach nearly £ 3,360 per year in October when it is subsequently modified by the regulator Ofgem and will remain relentlessly high throughout 2023 and 2024.

The energy price cap determines the bills for over 23 million households and provides an estimate based on average consumption. The October forecast is a 70% increase from the current level of 1,971 pounds per year and would represent a 163% increase in bills over last winter. Ofgem will announce the October level at the end of August.

Cornwall Insight believes the limit could exceed £ 3,600 in January before reaching a peak of nearly £ 3,730 in the second quarter of 2023. It is likely to remain high, at around £ 3,470 per year, at the end of 2023, according to the group. The latest forecasts, as energy futures suggest there will be little easing of the high wholesale prices of gas and electricity that have pushed up domestic bills, particularly after the Russian invasion of Ukraine.

“While the rise. . . for October and January is an urgent concern, it is not just the level – but the duration – of the hikes that are making these new forecasts so devastating, “said Craig Lowrey, Cornwall Insight Principal Advisor.” Given the current price level across the board. wholesale, this level of household energy bills currently shows little sign of declining in 2024 “.

Although some of Cornwall Insight’s forecasts for October and January are lower than other recent estimates, the group is among the first to predict that the surge in energy prices will continue to hit consumers’ pockets into 2024 and possibly even longer. long.

The warning sparked new demands from energy poverty activists and opposition politicians to increase financial aid for families already struggling with rising cost of living.

Conservative leadership contender Rishi Sunak announced in May a new family support package to be delivered in the fall, including £ 400 off all households’ energy bills. However, critics pointed out on Tuesday that the forecast for the October price cap has risen by more than £ 500 since the £ 400 relief was announced.

Based on the latest estimates from Cornwall Insight, the charity National Energy Action said another 2 million households could plunge into energy poverty this winter, where rising energy bills mean people can’t afford to live in one. warm and dry house.

Opposition lawmakers and environmental groups lobbied contenders to the Conservative party leadership to raise the government’s unexpected tax on oil and gas producers after BP reported its highest quarterly profit in 14 years on Tuesday.

“We need to see urgent changes now to help people with their bills this winter and the government’s unexpected tax needs to cover these profits to help finance them,” said Sarah Olney, a trade spokesperson for the Liberal Democrats.