Ofgem energy price cap falls – but average household bills still expected to rise
The energy regulator has reduced the cap on the amount energy companies can charge customers but bills are still expected to increase.
Ofgem has today announced the cap on the amount typical households pay on electricity and gas bills will drop to £3,280 from 1 April.
It’s a decrease from the previous cap of £4,279 effective from the beginning of January to the end of March and reflects the fall in wholesale energy prices.
Cost of living – latest: Warning energy bill rises will be ‘hammer blow’ to households
The price cap sets a maximum amount suppliers can charge per unit of energy and is regularly reviewed by Ofgem.
The amount is not the maximum that can be charged – customers using a lot of energy will have higher bills – but instead reflects typical usage levels.
Households had been protected from the previous high price cap due to the government’s energy price guarantee (EPG) which capped the energy unit price resulting in an average household bill of £2,500.
But bills are now likely to rise as the EPG threshold will increase to £3,000 for an average household from 1 April. Even with the £500 reduction in the price cap, the scheme will cost an estimated £26.8bn.
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‘Energy price increases are killing people’
As a result, the average home can likely expect bills to rise by an estimated 20%, an increase of £500 a year, according to energy consultancy Cornwall Insights as households absorb the gap between Ofgem’s price cap and the EPG.
Prices are to rise even further when the end of the £400 energy rebate scheme is factored in, Dr Craig Lowrey, the principal consultant at Cornwall Insight, said.
“Regrettably the forecast for April looks set to leave the price cap above the increased energy price guarantee level.
“While tumbling cap projections are a positive, unfortunately, already stretched households will be seeing little benefit before July.”
Read more:
Cost of living: Why are bills rising so sharply?
Under the rebate scheme, six instalments of about £66 were paid monthly to bill payers from October.
Commenting on the high bills, the Ofgem chief executive said, a social tariff which offers lower energy prices for vulnerable customers should be urgently examined.
“A very tough time for many households across Britain”
“Where people are struggling, we urge them to contact their supplier to make sure they are getting all the help and support they are entitled to,” Jonathan Brearley said.
“We also think that, with bills continuing to be so high, there is a case for examining with urgency the feasibility of a social tariff for customers in the most vulnerable situations.”
There is some good news ahead, Mr Brearley suggested, but prices are still not going to fall to the levels seen in the last 18 months.
“Today’s announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won’t make an immediate difference to consumers, it’s a sign that some of the immense pressure we’ve seen in the energy markets over the last 18 months may be starting to ease,” he said.
The pressure, however, will not be removed entirely.
“Prices are unlikely to fall back to the level we saw before the energy crisis,” he said.
“Even with the extensive package of government support that is currently in place, this is a very tough time for many households across Britain.”
Spending on the EPG will effectively be zero from July until the end of 2023 as Ofgem’s energy price cap is expected to fall below the guarantee, according to Cornwall Insights.
Ofgem’s July and October caps are forecast to be below £3,000. Such caps would mean there is no price difference in amounts charged by energy companies and what customers pay.
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Zendaya and Tom Holland are rumoured to be engaged after the 28-year-old actress appeared at the Golden Globes wearing a massive diamond ring on her left ring finger.
They met after working together on 2017’s Spider-Man: Homecoming and confirmed their relationship in 2021.
Sky News has contacted representatives for Zendaya and Holland for comment.
Zendaya and Tom Holland pose for photographers at the photo call for the film ”Spider-Man: No Way Home”. Pic: Invision/AP
Zendaya chatted to journalists on the Globes red carpet, where she was nominated for best actress in a musical or comedy for her role in the romantic sports drama Challengers.
Despite being pipped to the prize by Demi Moore, who won for her role in body horror The Substance, there was plenty of buzz around Zendaya’s large diamond ring, which was clearly visible throughout the show.
A Los Angeles Times reporter appeared to ask Zendaya about it, holding up her own engagement ring and pointing to it. Zendaya responded by showing her left-hand ring.
Zendaya arrives at the 82nd Golden Globes. Pic: Invision/AP
The reporter then asked if the actor was engaged and “she kept showing her ring, smiled coyly and shrugged her shoulders mysteriously”.
Holland, who is also 28, wasn’t at Sunday’s Globes.
Zendaya arrives at the 82nd Golden Globes. Pic: Invision/AP
Zendaya wore an orange Louis Vuitton ball gown, and diamond jewellery from Bulgari – for which she’s an ambassador – on the Globes red carpet.
But while the Dune star’s other jewellery items were listed in a press release, there was no mention of the ring on her left finger.
Zendaya, who rose to fame after her breakout role in Disney sitcom Shake It Up, became a household star after starring in Euphoria.
Tom Holland, who is the son of British actor/comedian Dominic Holland, won a role in Billy Elliot The Musical as a child, and has gone on to achieve global fame playing Spider-Man in six Marvel Cinematic Universe movies.
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