Millions Of Brits Warned Bills Could Rise By Nearly 70% In October
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Brits have seen energy prices soar in the months since Russia announced its invasion of Ukraine, with further increases coming amid fears that Russia will reduce the gas being supplied to Europe as backlash over sanctions.
Experts have previously warned that prices will rise again in October, but now predicted figures have led to estimations that bills could reach almost £3,300 per year.
Martin Young, a utilities analyst at banking and wealth management group Investec, earlier this year became one of the first to warn of an energy price cap increase in October, suggesting at the time it would reach £3,000.
Commenting on the estimations to The Mirror, Young said: "One thing is certain, the cost of energy crisis, and the broader cost of living crisis, are not going away anytime soon.”
Now he has warned it will reach more than £3,200; an estimation backed by consultants Cornwall Insight, which estimated yesterday (8 July) the average yearly bill would rise to £3,244.
Cornwall Insight noted that the Office of Gas and Electricity Markets (Ofgem) is consulting on whether to review the price cap every three months, in which case the Cornwall Insight suggested the average bill could rise to £3,363 a year in January.
Split throughout the year, such an increase would leave Brits forking out £280 per month for energy alone, on top of other bills such as rent or mortgage, water, food and council tax.
Our price cap predictions for Jan 2023 have risen to £3,363 a year for an average consumer, increasing from the £3,003 figure released two weeks ago.— Cornwall Insight (@CornwallInsight) July 8, 2022
Predictions for the Oct cap, have also seen a steep rise, and now sit at £3,244 a year.
Read more here: https://t.co/NLZRofoeLV pic.twitter.com/8zhONZPkzA
Dr Craig Lowrey, principal consultant at Cornwall Insight, explained: “There is always some hope that the market will stabilise and retreat in time for the setting of the January cap. However, with the announcement of the October cap only a month away, the high wholesale prices are already being 'baked in' to the figure, with little hope of relief from the predicted high energy bills.”
"As it stands, energy consumers are facing the prospect of a very expensive winter," Lowrey concluded.
Upon hearing the projections of bills up to £3,244 a year, money saving expert Martin Lewis said he 'felt sick'.
"It's horrendous," he wrote on Twitter, adding: “Especially as we're now near the end of the assessment period that sets Oct's cap, so this is the right ball park."
In the wake of the cost of living crisis, former Chancellor Rishi Sunak, who has since resigned from his position, announced that all UK households would receive a grant to reduce energy bills by £400 from October.