Household energy bills set to drop 14 per cent from April as ‘light at the end of the tunnel’ for consumers
The average UK energy bill is set to fall by £268 in April, according to the latest analysis from Cornwall Insight.
Published in a note today, the consultancy said a typical dual fuel consumer will be expected to pay £1,660 annually, under the Default Tariff Cap (price cap) down from the £1,928 annual bill expected for next month.
This trend is currently expected to persist throughout the year, with the bills falling further to £1,590 in July before a slight increase to £1,640 from October.
Since mid-November, wholesale energy prices have experienced a significant decline, triggering the anticipated drop in the price cap.
European gas storage is near 99.7 per cent full, above expectations for this time of year.
What’s more, contrary to initial concerns, the Israel-Hamas conflict and problems such as potential LNG production strikes in Australia have so far failed to materially impact energy supplies.
But Cornwall warned UK energy prices have had a rough time adapting to geopolitical events such as the pandemic and Russia’s invasion of Ukraine, so situations such as the unfolding cargo ship attacks in the Red Sea should be closely monitored.
Other developments to watch include the ongoing consultations on potential changes to the price cap, including the standing charge and bad debt collection, which could impact the overall price cap level.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said today’s predictions could offer “a small light at the end of the tunnel” as the UK braces for energy bill rises in January.
He also called on the government to shore up future energy supply.
“Ultimately, waiting and hoping that we will avoid another global incident that sends energy prices climbing is not a sustainable strategy for government,” he said.
“To achieve substantial reductions below pre-crisis levels, we must focus on long-term strategies which increase domestic renewable energy sources and reduce our reliance on volatile imports.”