The price cap on energy bills is set to increase to almost £3,000 at the start of October, according to a new prediction. The cap is £1,971 at the moment, but later this year it is forecast to soar to around £2,980.
The higher sum would cover the next period, which runs between October and December. The price cap – a policy that came into force in 2019 – limits the rates a supplier can charge for their default tariffs, including the standing charge and price for each kWh of electricity and gas.
The latest prediction comes from Cornwall Insight. Analysts used the latest available data to estimate the future energy price.
The current cap of £1,971 is already a record which beat the previous high by 54%. Previous recent estimates put the next price cap at £2,800.
Those estimates prompted the Chancellor, Rishi Sunak, to announce a £15 billion package of measures to tackle rising prices. This included a £400 energy bill discount for every household, plus a one-off £650 payment to more than eight million low-income households on benefits.
Cornwall Insight predicts another small rise in the price cap to £3,003 in January 2023 before dropping down to £2,758 in April and £2,686 in July. The cap was as low as £1,042 in the summer of 2020.
Energy prices first rose due to high demand as economies around the world reopened due to the Covid pandemic easing. Then Russia, a major provider of gas, invaded Ukraine, disrupting supplies.