Cornwall Insight has released its latest Default Tariff cap predictions for July to September (Q3) and October to December (Q4) at £2,024.58 and £2,076.12 respectively.
These predictions show a drop of over £1,000 from the current price cap which is set at £3,280.
Figure 1: Cornwall Insight’s Default tariff cap forecasts
Figure 2: Default Tariff Price cap forecasts, Per Unit Cost and Standing Charge including VAT (dual fuel, direct debit customer, national average figures)
If future price caps remain close to Cornwall Insight’s predictions, from July onwards household bills will revert to the price cap level for the first time since the introduction of the Energy Price Guarantee.
Despite a much more positive outlook for the future, household bills will still see historic highs compared to rates paid before and at the beginning of the energy crisis which began in 2021.
For reference, the price cap for Summer 2022 was £1,660, a 30% increase from what were then record levels seen in Winter 2021-22.
“The energy market has been on a difficult journey over the past three years, with consumers having faced energy bills at levels never experienced before. Our forecasts for the second half of 2023 show the prospect of a more stable energy climate, which all being equal, will see energy bills continue their downward trajectory. However, in the short-term they still remain well above historic highs,” said Dr Craig Lowrey, Principal Consultant at Cornwall Insight.
“Of course, we must never take anything for granted, and as quickly as they fall, global shocks and our reliance on energy imports could see the energy market, and subsequently bills, rise yet again. These predictions should not be taken as a signal that the problems in the energy market have been resolved, but instead used as motivation to implement an energy system which will stop us from ever again seeing the market highs that caused – and continue to cause – so much hardship. By focusing on establishing a sustainable renewables-based energy system, we can become resilient to external interference, sure up UK energy supply and deliver affordable bills for households.”
