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Cost of living: Energy price cap expected to rise by £1,000 to new record highs

The price cap on energy bills will rise by a further £1,000 in October, according to a new prediction.

Currently, it is £1,971 – already a record which beat the previous high by 54%.

Analysts used the latest available data to estimate the future energy price.

Previous recent estimates put the next price cap at £2,800.

 

These predictions were enough for the Chancellor to reveal a multi-billion pound package of support.

This included £400 for every household in the country and extra support for millions of the most vulnerable.

Energy prices on wholesale markets have been soaring over the past year.

A timeline of price caps both past, present, and forecast

  • Summer 2020 – £1,042
  • March 2022 – £1,277
  • Current – £1,971
  • October 2022 – £2,980.63
  • January 2023 – £3,003
  • April 2023 – £2,758
  • July 2023 – £2,686

Cornwall Insight

The increases were firstly caused by high demand as global economies reopened following the pandemic.

Then Russia’s unprovoked full-scale attack on Ukraine caused prices to spike even further.

The crisis has reduced the number of energy suppliers on the market to just over 20, while competition has been destroyed.

No suppliers are able to offer a price below the cap’s level.

The price cap is already worse for customers than it has ever been.

For an average household, the price of energy increased from £1,277 to £1,971 in April.

Previously, the price had been as low as £1,042 in the summer of 2020 – the cheapest since the policy first came into force in 2019.

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.

It suggests high prices are here to stay for some time for British households.

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