Cornwall Insight has announced it’s final Default Tariff Cap prediction for January to March 2024 at £1,931 for a typical dual fuel household.
Announced following the close of the observation window yesterday (15 November) the market researcher’s final prediction represents a 5% increase from the current cap which sits at £1,834.
The final prediction remains roughly in line with Cornwall Insight’s preceding forecast, with the price cap expected to decline from the end of March, subject to ongoing volatility within the wholesale energy market.
Default Tariff Cap forecasts using new Typical Domestic Consumption Values (dual fuel, direct debit customer):
UK’s increasing reliance on Liquified Natural Gas (LNG) has made the nation more susceptible to wholesale market volatility caused by geopolitics, such as disruptions to the Finnish Baltic connector, the Israel-Hamas conflict and industrial action at gas production facilities in Australia, which cause higher energy unit prices.
Default Tariff Cap forecasts, Per Unit Costs and Standing Charge (dual fuel, direct debit customer):
Cornwall Insight has also predicted an increase in electricity standing charges, including an increase of 8p per day in April. The company has attributed this rise predominantly to ongoing network charge reform shifting more that charged from per unit to per day, which will mean customers will incur costs regardless of their energy consumption.
“An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels. This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between,” said Dr Craig Lowrey, principal consultant at Cornwall Insight.
“The King’s Speech acknowledged that it is our exposure to volatile international energy markets that has led to higher and less predictable bills. While we continue to advocate for immediate targeted support for vulnerable consumers, it is evident that the only enduring solution lies in transitioning the UK away from the influence of global energy prices towards sustainable, domestically sourced energy.
“The government’s commitment to attracting record levels of investment in renewable energy sources is a promising step, and ensuring they deliver on this pledge will be paramount in shaping a more stable and affordable energy future.”