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UK Energy Bills Set To Be £500 Lower Than Last Summer

May 17, 2024
in Business
UK Energy Bills Set To Be £500 Lower Than Last Summer
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UK energy bills are forecast to continue falling into the summer, with the average household about £500 ($632) better off than a year earlier.

Author of the article:

Bloomberg News

Bloomberg News

Eamon Akil Farhat

Published May 17, 2024  •  1 minute read

lcrw]4p4iioe7abnr3p18pl4_media_dl_1.pnglcrw]4p4iioe7abnr3p18pl4_media_dl_1.png Ofgem, Cornwall Insight

(Bloomberg) — UK energy bills are forecast to continue falling into the summer, with the average household about £500 ($632) better off than a year earlier.

Energy consultancy Cornwall Insight Ltd. predicts the typical tariff will drop 7% to £1,574 from the current cap as wholesale gas and electricity costs ease. Ofgem is expected to announce the new energy price cap, which sets the maximum tariffs suppliers can charge most households in Britain, on May 24. It will take effect from July 1.

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Still, bills remain “hundreds of pounds” above pre-crisis levels, presenting an enduring challenge for households, said Craig Lowrey, principal consultant at Cornwall Insight. 

Weak industrial demand and high levels of gas storage following a mild winter have weighed on wholesale energy prices. Cornwall Insight said the decline would have been even steeper without the geopolitical risks that have impacted on the market in recent weeks.

“The path forward for energy pricing remains uncertain, and with stakeholders advocating for reforms – coupled with a general election on the horizon – energy bills are likely to be an area of continued debate and transformation in the months ahead,” Lowrey said.

Ofgem said on Tuesday it was exploring removing the ban on suppliers offering introductory discounts to win over customers. Removing this ban could make bills even lower by winter, according to comparison website Uswitch.com.

“Forcing providers to offer the same energy deals to new and existing customers has meant that suppliers have been encouraged to give up delivering cheap deals.” Richard Neudegg, director of regulation at Uswitch.com, said.

Cornwall Insight expects bills to increase slightly in October, before falling again into 2025.

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