Energy bill cap forecast to hit £4,347 after Truss U-turn on support
The average annual energy bill will rises to more than £4,000 from April after Liz Truss’s U-turn over her policy to ease the cost of living crisis, according to the sector’s leading forecaster.
The price cap for a typical dual-fuel tariff will now be £4,347 in six months’ time if the government does not offer special support, according to consultancy Cornwall Insight.
The new chancellor, Jeremy Hunt, said on Monday that the Energy Price Guarantee (EPG), which caps the unit price of energy and was intended to last for two years from this month, will now be limited to six months.
A Treasury review is in progress to devise ways of targeting the policy at those consumers most in need of support, which will “cost the taxpayer significantly less” after April.
The quarterly Ofgem price cap had been due to rise 80% to £3,549 from 1 October. Instead, Truss announced the price guarantee scheme designed to limit typical household bills to about £2,500 a year.
Cornwall Insight said it now expects annual bills to equate to £4,347.69 from April to June, with gas at £2,286.70 and electricity at £2,060.99.
The consultancy predicts the price cap easing slightly to £3,697 in the July to September quarter, and then £3,722 from next October until the end of 2023. That is still far higher than the £1,277 annual bills stood at a year ago.
Cornwall Insight welcomed Truss’s decision and called on the government to “develop options for targeted schemes that mitigate the gamble being taken on gas prices, whilst critically still protecting those who need support, alongside increasing the focus on energy efficiency”.
The consultancy’s chief executive, Gareth Miller, called for the government to use the period in which the EPG is in place to look at more
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