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UK regulator raises electricity price cap — RT Business News

UK household annual energy bills would hit around $5,200 without emergency aid, Ofgem says

UK energy regulator Ofgem has announced plans to raise its price cap for average household energy bills by almost 21% to £4,279 ($5,172) a year from January to the end of March 2023.

Ofgem said the cap, which is currently adjusted on a quarterly basis, will rise by £730 for the three months from the start of 2023. The rise preceded the government’s £2,500 freeze until April.

“There is no immediate action for consumers following today’s announcement,” said the regulator.

The announcement means London’s emergency response to limit energy bills will save an average household around £1,779 a year compared to what they would have had to pay without the cap.

The government-backed price guarantee, aimed at protecting households against the latest economic shock linked to anti-Russian sanctions, comes as the UK faces what is expected to be a prolonged recession.

UK debt soars due to energy support measures

Despite the government-guaranteed limit, an annual cap of £2,500 is almost double the amount households pay in 2021. Average household bills were capped at £1,277 a year ago, below the price cap of Ofgem. The Government’s Energy Price Guarantee (EPG) is set to increase by an average of £3,000 a year from April 1 to the end of March 2024.

The EPG is expected to cost the government up to £42billion, according to analysts at Cornwall Insight, quoted by The Guardian. The consultancy expects Ofgem’s cap to be reduced to £3,921 from April and then to around £3,400 for the final six months of 2023.

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