Household energy bills could jump by £332 a year in July as recent sharp increases in wholesale prices are set to feed through into Ofgem’s price cap, according to the latest forecasts.
Analysts Cornwall Insight said forecasts for the watchdog’s price cap from July to September had surged to £1,973 a year for a typical dual fuel households – an increase of £332 or 20% on April’s cap.
Cornwall said household energy bills over the summer look set to be higher than it had anticipated prior to the escalation of conflict in the Middle East, which has sent wholesale gas and oil prices soaring.
Even if wholesale prices quickly returned to pre-conflict levels, some of the recent volatility will be baked into the next price cap, which covers July to September, it said.
However, the figure is likely to change and the size of the increase to the next price cap will depend on how long gas prices stayed elevated and how long the period of disruption continues.
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