The energy price cap could top £7,000 next year, experts warned for the first time, as Ofgem announced the highest cap on record.
The energy regulator said that the price cap for the average household would increase by 80% to £3,549 for the three months starting in October.
But experts at energy consultancy Auxilione warned that the cap could double even from that record high by April next year, hitting £7,263.
The prediction is based on the current cost of buying energy on global markets and also sees bills hitting £5,405 in January.
Fellow consultants at Cornwall Insight are a little more optimistic. Their model expects the cap to only reach £5,387 in January and then £6,616 from April.
Both consultancies then expect bills to fall by between £700 to £800 in July when compared to the April cap.
It is the grimmest forecast yet from the two outfits, whose predictions for October’s price cap were close to Ofgem’s decision.
Auxilione’s final forecast was just £27 above what the cap was set at, while Cornwall Insight’s prediction was £5 above.
The predictions are largely based on what gas prices are doing at the moment, so are subject to a lot of change between now and January, let alone before April.
“While there is still some time until the January and April caps are set, the energy crisis is showing no sign of abating,” said Dr Craig Lowrey, principal consultant at Cornwall Insight.
“A key focus for the next Prime Minister and for Ofgem must be protecting consumers, and the wider economy from the impact of this rise,” he added.
Due to the rising cost of energy the price cap is increasing in October.
Government support is available to help with your energy bills.
Households will start receiving the £400 Energy Bills discount in 6 instalments from October.
Find out more👇
— Dept for BEIS (@beisgovuk) August 26, 2022
“There are several avenues that can be explored including a review and expansion of the current support package of at least £400 per household.
“However, all of these are temporary solutions and must be accompanied by a focus on implementing a viable long-term solution.”
He said that the purpose of the price cap is being undermined by the unprecedented rises in bills that are hitting households.
“Throughout the energy crisis, the Government and Ofgem have remained committed to the cap, and in its ability to shield consumers from a volatile energy market.
“However, the cap was never meant to be a permanent solution, it was created for a different energy market than the one we face today and has not protected consumers from what will be incredible hardship this winter.”