Energy price cap predicted to rise in January, raising household bills by 1%
ITV News' business editor Joel Hills explains why energy costs are rising
Energy bills could be set to increase by 1% in the new year, as analysts have forecasted a price cap rise in January.
Energy consultancy Cornwall Insight said it expects Ofgem to announce a hike in the typical household's energy bill by £19, up to £1,736 from £1,717 on January 1.
The consultancy had previously predicted a 1% fall, but said this was now no longer the case. The predicted hike comes after energy prices rose by 10% in October.
Cornwall Insight said: “Given the price cap rise in October, many will have been hoping to see a fall in the cap for January. Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter.”
Despite January's forecast increase, prices are still expected to fall slightly in both the second and fourth quarters of next year.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets. The regulator will confirm the level for the first quarter of next year on November 22.
The energy price cap was introduced in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour of energy they use.
It does not limit total bills, because householders still pay for the amount of energy they consume.
Subscribe free to our weekly newsletter for exclusive and original coverage from ITV News. Direct to your inbox every Friday morning.
Meanwhile, millions of pensioners are facing a winter with less support, after the new Government decided to scrap winter fuel payments for those who do not receive pension credits or other benefits. About 10 million pensioners will miss out on the payments of up to £300 this year.
The energy price cap is still significantly lower than when the energy crisis peaked following Russia's invasion of Ukraine in 2022.
However, prices remain "very sensitive to global events", Cornwall Insight said.
Have you heard The Trapped? Listen as Daniel Hewitt exposes the UK's dirty secret..