Households braced for 50 per cent hike in annual energy bills
Ofgem will unveil its latest update to the consumer price cap today, with millions of UK households bracing for a painful price hike in energy bills this spring.
Cornwall Insight has warned the cap, which limits what suppliers can charge for default tariffs, could rise to nearly £2,000 per year to reflect soaring wholesale costs.
This would be a 50 per cent bump on current prices, with mechanism currently set at £1,277 per year for average use.
According to The Times, Downing Street could roll out a £6bn loan scheme this week, providing households with a £200 rebate to soften the blow from rising energy prices.
This will involve taxpayers effectively underwriting loans to energy suppliers.
The Institute of Economic Affairs’ Andy Mayer criticised the proposed measures.
He told City PM the plans will only provide partial relief for households, and come “at the expense of higher bills for what may be three to five years as the loan is repaid.”
It also remains unclear if wholesale prices will fall in the near future, with trade body Energy UK suggesting the cap could rise again in October.
When approached for comment, the Treasury said: “We will provide an update in due course on further help for households across the UK to meet their energy costs in the face of rising global gas prices.”