Energy regulator Ofgem has today (23 August) revealed that the price cap for the October – December period will rise by 10% to £1,717 for a typical household in the UK.
The rise follows a decrease in the past two price cap announcements. For Q2 2024, it was set at £1,690, before decreasing further to £1,568 in May. The new cap is also 6% (£117) cheaper compared to the same period last year (£1,834).
The rise in the energy price cap may well ring alarm bells throughout the energy industry, especially with Cornwall Insight’s recent prediction having caused concern.
Cornwall Insight predicted the energy price cap would increase to £1,714 per year for the average household on a dual fuel tariff. The consultancy group said that several factors will have contributed to the rise, with rising wholesale market prices since the start of August the key driver behind the uptick in bills.
The analysis notes that the market has not fully recovered from the energy crisis caused by Russia’s invasion of Ukraine and, as such, remains highly sensitive to global events that could disrupt supply. Additionally, the UK’s reliance on imported energy leaves the country even more vulnerable to global volatility.
Dr Craig Lowrey, principal consultant at Cornwall Insight, believes the government should adopt a “two-pronged approach” to tackling rising energy bills with a “strong emphasis on increasing domestic energy production”.
General public supportive of Labour energy policies despite price cap rise
Despite the predicted and now confirmed rise in the energy price cap, the general public has shown support for the newly elected Labour government’s green policies, which has seen policies such as an overturning of the de facto ban on onshore wind developments in England.
Research conducted for the Energy and Climate Intelligence Unit (ECIU) revealed that the public considers increased UK ‘energy independence’ (44%) and lower energy bills (42%) as measures of success for Labour’s policies to promote clean energy.
And perhaps more significant, while 61% of respondents did not expect the government’s policies to lower bills, there is a relatively high awareness of and support for plans to establish the state-owned Great British Energy Company.
