The average UK household could see their energy bill rise to £500 in January alone, experts have warned.
Dr Gemma Berwick, a senior consultant at BFY Group, said: “Following further rises in wholesale prices as flows of gas from Russia to Europe via the Nord Stream 1 pipeline drop to 20% of capacity, we now forecast the Ofgem price cap to rise to £3,420 in the fourth quarter of 2022 and £3,850 in the first quarter of 2023.
The cap used to be updated twice a year, but recent changes mean a new price cap will be set every three months. The cap is based on the average cost of energy in the previous months. Ministers were forced to act in May by announcing a major package of support for households, but at that point the prediction for October’s price cap was just £2,800 – more than £600 lower than the latest forecast.The gloomy price cap forecast comes amid warnings the UK’s electricity supply might be tight during the winter.
The grid needs to make sure it has enough electricity generators ready to go when demand for electricity peaks, meaning it needs to maintain a margin above the forecasted demand to deal with any short spikes.
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UK energy bills for most vulnerable to hit £500 a month in January\n\t\t\tExpert insights, analysis and smart data help you cut through the noise to spot trends,\n\t\t\trisks and opportunities.\n\t\t\n\t\tJoin over 300,000 Finance professionals who already subscribe to the FT.
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UK energy bills for most vulnerable to hit £500 a month in January\n\t\t\tExpert insights, analysis and smart data help you cut through the noise to spot trends,\n\t\t\trisks and opportunities.\n\t\t\n\t\tJoin over 300,000 Finance professionals who already subscribe to the FT.
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UK energy bills for most vulnerable to hit £500 a month in January\n\t\t\tExpert insights, analysis and smart data help you cut through the noise to spot trends,\n\t\t\trisks and opportunities.\n\t\t\n\t\tJoin over 300,000 Finance professionals who already subscribe to the FT.
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