FAMILIES have been warned annual energy bills could rise to £4,200 as prices surge again.
Gas and electricity bills could reach hundreds of pounds more than previous predictions, according to experts.
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Previously, bills were estimated to rise to £3,358 from October and £3,616 from January.
In May, the Government announced an energy costs support package – worth £400 per household – in response to predictions that bills would rise to £2,800 for the average household in October.
But experts at Cornwall Insight have said that bills are now likely to rise to £4,200 from January as wholesale prices surge again.
Forecasts for the October price cap have also seen a rise, going up by more than £200, with predictions for an average bill now sitting at £3.582.
Experts blamed the new increase on rises in the wholesale price of energy and changes that regulator Ofgem has made to how it calculates the price cap.
The new estimates follow a massive billing shake-up announced by Ofgem this week, which will see bills rise more frequently.
Ofgem reviews the energy price cap – which limits how much suppliers can charge customers – every six months.
But last week it announced it will now be reviewed twice as often, meaning bills are likely to soar not just two times, but four times, a year now.
Families are set to find out how much prices will go up by on August 26, with the change coming into force from October 1.
The exact change to the price cap is yet to be decided by the regulator.
It comes after energy consultancy Auxilione predicted bills could rise by as much as £4,400.
Dr Craig Lowrey, principal consultant at Cornwall Insight said: “Rather than critiquing the methodology of the cap, it may be time to consider the cap’s place altogether.
“After all, if it is not controlling consumer prices, and is damaging suppliers’ business models, we must wonder if it is fit for purpose – especially in these times of unprecedented energy market conditions.”
More to follow…
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