British households are warned: they can expect to see their energy bills skyrocket, literally. Regulated energy prices will increase by 80% from October. Result: in the midst of a crisis in the cost of living, gas and electricity bills could increase further next year, Ofgem, the British sector regulator, announced on Friday 26 September.
The ceiling will increase from 1,971 pounds (2,332 euros) per year per average household to 3,549 pounds (4,198 euros) from October. Energy prices have thus almost tripled in one year for 24 million households – around 85% of the population – whose annual bills amounted to an average of 1,277 pounds (1,509 euros) in October 2021. the approximately 4.5 million customers with prepaid meters, the bill will increase by an average of 59 pounds (70 euros). And, given the current gas price trend, Ofgem warns that “prices could get significantly worse throughout 2023”. He calls on the government to provide aid “urgent” in the midst of a cost of living crisis.
“The increase reflects the continued rise in global wholesale gas prices, which started with the deconfinements after the Covid-19 pandemic; these prices were pushed to unprecedented levels when Russia slowly cut off its gas supplies to Europe”argues Ofgem.
Since this threshold is calculated on the basis of the average of wholesale gas prices during the previous months, experts expect it to be raised to more than 4,000 pounds in January and up to 6,000 pounds in the spring according to projections. the most pessimistic, which should fuel inflation already at more than 10% per year in the United Kingdom.
“We are aware of the massive impact this price cap hike will have on households across Britain and the tough decisions consumers will have to make.”commented Jonathan Brearley, chief executive of Ofgem.
Ofgem chief executive Jonathan Brearley explains why the energy price is being increased to £3,549 – telling… https://t.co/DqbIPK2BVW
Ofgem clarifies that the cap provides for a ” modest “ profit for suppliers on energy sales to households, but that, “unlike energy producers, most distributors are currently not making a profit”.
Discounts for vulnerable households and retirees
Employers, suppliers and associations call for immediate government action to avoid a shock “dramatic” for low-income households, already faced with inflation at more than 10%, the highest of the G7 countries, while the British economy is on the verge of recession. According to the University of York, two-thirds of households in the UK will be in fuel poverty by January 2023.
“We are seeing a situation of great stress among our customers. Average debt per customer increased by 30% to £167. I would say around a third of our customers are fuel poor, and another 20% could be.”underlines Philippe Commaret, commercial director of EDF for the United Kingdom, interviewed by Agence France-Presse.
The Minister of Economy and Finance, Nadhim Zahawi, also acknowledged that “The energy price cap announcements will cause stress and anxiety for many people, but help is coming, with £400 off energy bills for all, £650 for vulnerable households, and £300 books for retirees.
“While Putin drives up energy prices in revenge for our support of Ukraine’s courageous fight for freedom, I work tirelessly to develop new aid”he assured, a few days before the announcement of the name of Boris Johnson’s successor in Downing Street.
The favorite to replace Boris Johnson, the very Thatcherite Liz Truss, had until then favored tax cuts more than direct aid, which she regularly describes as “bandages”. On Friday, she seemed to soften her position, in a column published in the DailyMail : “If elected leader of the Conservative Party and Prime Minister, I will take decisive action when I arrive in Downing Street on immediate aid, but I will also tackle the root of the problem. »
