Key events
Britain’s energy price cap cut by 7% this summer
Newsflash: domestic gas and electricity prices for millions of households across Great Britain will fall by 7% from July – the first drop for a year.
Energy regulator Ofgem has announced that its quarterly cap on domestic gas and electricity charges would fall from July by the equivalent of £129 a year for the average home, due to the drop in wholesale energy prices in recent months.
The cut, to the maximum cost of a unit of electricity and gas, means a typical annual dual-fuel bill will drop to £1,720. But, there’s no cap on how high a bill can be.
You can see the details from Ofgem here.
Households which buy their energy through variable tariffs will see an immediate impact on their bills as the cap takes effect in July. But bill payers could still face higher bills if they use more than the typical amount of energy.
However, prices would still be higher than a year earlier, and significantly above levels seen at the start of the decade.
Four years ago, for example, the price cap was set at £1,138 for an average household.
Reaction to follow….
Fuel Bank Foundation: poorest households facing a summer of hardship
Charities fear that many households will struggle to pay their energy bills, even if the price cap is lowered this summer.
Matthew Cole, CEO of Fuel Bank Foundation, warned this week:
“The drop in the energy price cap from July may sound like good news, but for many people already struggling to make ends meet, it won’t go far enough. Even in summer, when heating isn’t needed as much, energy is still essential; people need it to cook meals, run a washing machine, stay clean, and keep fridges and medical equipment running. These are basic needs, not luxuries.
“The cost of living is still incredibly high, and many people, especially those who are vulnerable or have low incomes, are dealing with energy debt built up over the last few years of sky-high bills.
“A slight drop in prices won’t fix that. People are still being forced to make tough choices — between topping up the meter or putting food on the table.
Today’s price cap announcement comes just two days after Prime Minister Sir Keir Starmer signalled a partial U-turn on cuts to pensioners’ winter fuel payments, after a backlash.
Ofgem to set latest energy price cap for household bills
Good morning. British households may learn today that energy bills will fall this summer, for the first time in a year.
Energy regulator Ofgem is poised to announce its latest price cap on bills in England, Scotland and Wales this morning, at 7am, and industry analysts predict it will be cut.
The cap limits how much firms can charge customers for units of gas and electricity, and is set every quarter.
This time, experts are forecasting the cap will be cut for the first time in a year, due to recent falls in the wholesale gas and oil prices. That would lower the energy bills of millions of households across Britain in July-September.
Earlier this week, consultancy Cornwall Insight predicted the cap will be cut by 7% – that would slash around £129 off the annual bill for a typical dual-fuel household this summer, from £1,849 under the current limits.
However, it’s important to note that the cap applies to the cost of a unit of energy – there’s no cap on how large a bill a family can run up.
And as Dr Craig Lowery, a consultant at Cornwall, pointed out on Monday, energy bills were still too high for many.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost of living crisis, and bills remain well above the levels seen at the start of the decade.”
“The fall is also a clear reminder of just how volatile the energy market remains – if prices can go down, they can bounce back up, especially with the unsettled global economic and political landscape we are experiencing. This is not the moment for complacency.”
The agenda
-
7am BST: Ofgem to announce latest energy price cap
-
7am BST: Retail sales report for Great Britain in April
-
9.30am BST: Latest estimate for how many UK young people are not in education, employment or training
-
3pm BST: US new home sales data
