Energy price cap warning as fears household bill could hit £500 in January

Households across the country could see their energy bill around £500 in January, according to predictions by experts.

Utility consultancy BFY Group said they expect the bill cap to reach £3,850 between January and April next year. The new prediction, is worth hundreds of pounds more than previous ones.

The latest forecast comes after the Kremlin further strangled the flow of gas to Europe. While the UK gets very little of its gas directly from Russia, the price paid here is determined by what happens across the continent.

Dr Gemma Berwick, a senior consultant at BFY Group said: “Following further rises in wholesale prices as flows of gas from Russia to Europe via the Nord Stream 1 pipeline drop to 20% of capacity, we now forecast the Ofgem price cap to rise to £3,420 in the fourth quarter of 2022 and £3,850 in the first quarter of 2023,”

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“This will make the average household bill over £500 for January alone.” If the prediction comes to pass, it would result in a near-doubling of today's record price cap of £1,971. Another consultancy, Corwall Insight, had predicted the price cap would go to £3,364 only three weeks ago.

Ofgem can update the energy price cap twice a year, however, new changes means that it now has the power to change it every three months going forward. The cap is based on the average cost of energy in the previous months.

The rise in energy bills would place even more pressure on millions of households that are already struggling to survive under the soaring cost of living crisis. In May, ministers were forced to act by announcing a major support package for struggling households.

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