Energy price cap at £2,800 from October, says Ofgem

The energy price cap is expected to surge from £1,971 to £2,800 a year in October, the boss of Ofgem has told Rishi Sunak, piling further pressure on the chancellor to help struggling Britons through a deepening cost of living crisis.

- BEN CHAPMAN

The energy regulator's chief executive, Jonathan Brearley, told MPs on the Business, Energy and Industrial Strategy Committee that he would write to the chancellor telling him he expected the cap to be "in the region of £2,800" when it is reviewed later this year.

Gas prices were “higher and more volatile" in the wake of Russia's invasion of Ukraine, Mr Brearley said. "I know this is a very distressing time for customers, but I do need to be clear with this committee, with customers and with the government about the likely price implications for October."

He stressed that the wholesale prices used to calculate Ofgem's cap were uncertain and could change between now and October.

Mr Brearley's warning came as petrol and diesel prices rose to new record highs and Rishi Sunak reportedly considered imposing a windfall tax on energy generators that have reaped bumper profits while UK households face a cost of living crisis.

The chancellor has instructed Treasury officials to work on plans for a potential tax on more than £10bn of excess profits made by electricity generators, according to sources cited by the Financial Times.