Energy bills are set to rise again when the price cap changes in October because of upcoming changes made by the regulator.
The price cap will increase to £1,737 in autumn, according to energy consultancy Cornwall Insight in its final forecast.
It represents a £17 – or 1 per cent – increase from the current price cap, which is currently set at £1,720 for a dual-fuel household.
It means households would pay 26.29p/kWh for electricity and 6.19p/kWh for gas, with standing charges of 54p and 33p, respectively.
Cornwall Insight said its forecast factors in Ofgem’s changes, which include the expansion of the Warm Home Discount scheme for vulnerable households and is expected to add £15 to a typical bill.
Price rise: Cornwall Insight anticipates a small increase in Ofgem’s price cap in October
In June, the Government announced that nearly 3million more low-income households will be eligible for the £150 discount this winter.
The forecaster added that wholesale prices for electricity and gas are on a downward trajectory but remain volatile because of geopolitical factors, with US trade policy an ‘underlying concern’.
Europe is expected to ease rules on gas storage stocks for the winter months which is expected to push prices downwards too.
Dr Craig Lowrey, principal consultant at Corwnall Insight said: ‘News of higher bills will not be welcomed by households, especially as winter approaches.
‘While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs. It’s a reminder that the price cap reflects more than just the market price of energy.’
In the longer term, the forecaster anticipates a small drop in the price cap in January but this will depend on geopolitics, weather patterns, and changes to policy costs.
While energy prices are slowly coming down, they remain higher than the levels seen before the energy crisis, but it’s possible to get a fixed energy deal that is cheaper than the price cap.
Is it a good time to fix your energy bill?
Many households have already moved to a fixed energy deal to save money on their monthly bill.
Suppliers are still offering competitive deals that undercut the current price cap, but with prices set to fall later this year, are they worth it?
Richard Neudegg, director of regulation at Uswitch.com says: ‘A predicted 1 per cent increase in the October price cap may not seem significant – but it brings into sharp focus that consumers need to get ready for the winter now.
‘Most households will use significantly more energy in the colder months, so the October cap rates will dictate the cost of keeping our homes warm as winter starts to bite for those households still on the price cap.
‘Bill payers on a standard variable tariff can beat these expected rises and save on bills by switching to a well-priced fixed deal now.’
Outfox Energy is offering a 12 month fixed deal at £1,422, representing a £315 saving on the July price cap and and £298 for October’s predicted prices.
Its 24 month deal offers a saving of £263 from the current price cap, while customers can save £261 via its 15 month deal.
Fuse Energy’s 13 month deal is priced at £1,460 which offers a saving on both the current and predicted price cap.
