Energy price cap rises to three-year high
Brits are set for another squeeze from energy bills this winter after watchdog Ofgem confirmed the price cap was set to rise to a three-year high. The regulator said on Wednesday the default tariff for consumers across Britain would increase four per cent to £1,723 for the final quarter of the year. It follows a [...]
The UK's energy price cap is set to reach its highest level in three years this winter, according to the energy regulator Ofgem. The default tariff for consumers across Britain will increase by four percent to £1,723 for the final quarter of the year, following a 13 percent rise in the previous quarter. This significant hike is primarily attributed to the ongoing conflict in the Middle East, which has driven up gas and oil prices.
Brent crude, the international benchmark for oil, surged past $110 per barrel during the height of the war and has remained above $85 per barrel for the past month. Extreme weather conditions in Britain and Europe have also contributed to higher power demand and restricted generation, further impacting energy costs. The price cap serves as a safeguard for approximately 22 million British households on default tariffs, capping the maximum rates and standing charges that energy suppliers can charge.
Economists anticipate a significant increase in the headline rate of inflation in the latter months of the year due to persistently rising energy prices. Inflation jumped to 2.9 percent for the 12 months to July, up from 2.6 percent in the previous month, with raw material and goods prices lagging due to a decline in crude oil and refined petroleum prices.
Prime Minister Andy Burnham pledged to provide some relief to British residents as he assumed office last month, announcing plans to remove VAT from domestic electricity bills starting in October.
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