Winter energy prices expected to rise to three-year high
Millions of households will be affected by an increase in the energy price cap by regulator Ofgem.
Household energy prices are set to increase to the highest level in three years, according to regulator Ofgem. The price cap will rise by 4% on October 1st, driven by higher wholesale gas prices due to the Iran war. This increase will cost a typical household £60 more per year, with over a third of households already on fixed tariffs where prices won't change.
The government has introduced a VAT cut on electricity bills to provide relief, estimated to save households £45. However, opposition parties criticize the Labour government for not doing enough to address the cost of living pressures. Suppliers are calling for additional support for those struggling to pay, citing a surge in energy debt.
The price cap is expected to hit household bills as colder weather arrives in October. Ofgem's director general for markets, Neil Kenward, noted that while gas bills are rising by 8%, electricity bills are falling slightly due to the VAT cut. As a result, transitioning to heat pumps could make it cheaper for households to heat their homes.
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