Energy bills to rise ahead of winter instead of a price fall

Energy bills for average UK households are set to rise by £35 from October, Ofgem has confirmed, despite previous predictions that prices would fall.

- KARL MATCHETT

The regulator confirmed the 2 per cent rise in bills yesterday, meaning the average annual bill will rise from £1,720 to £1,755. Bills had previously been forecast to fall in October by a similar amount.

At the last announcement in July, bills fell by around seven per cent from the previous cap set for April to June of this year, with lowered wholesale energy prices and supplier costs contributing to the change.

Part of the rise this time around can be explained by the expansion of the warm home discount scheme for vulnerable households, which is expected to add around £15 to a typical bill, while also giving £150 in support to 2.7 million extra people.

However, wholesale prices for electricity and gas remain volatile as a result of global political instability and uncertainty over US trade policy.

The energy price cap peaked in early 2023 at £4,279 after surging in 2022 as a result of post-Covid energy demand surges, tight gas supply and the war in Ukraine. It had dropped back to £2,074 by mid- to late-2023, remaining between £1,568 and £1,928 across last year and this.

Campaigners against higher energy bills suggest some families are still struggling to pay off debts from two years ago when energy prices rose.

“While there is still more to do, we are seeing signs of a healthier market,” said Ofgem director general Tim Jarvis. “There are more people on fixed tariffs saving themselves money, switching is rising as options for consumers increase, and we’ve seen increases in customer satisfaction, alongside a reduction in complaints.