Half of households face fuel poverty in ‘catastrophic winter’, warns energy chief

Britain is hurtling towards a “catastrophic winter” which could see half of households in fuel poverty, an energy boss has warned as gas prices remained close to all-time highs.

Philippe Commaret, managing director of customers at Big Six firm EDF, made the alarming prediction the day after investment bank Citi forecast that the price cap could sky-rocket to £4,567 in January, and inflation to a staggering 18.6 per cent.

“We face, despite the support that the Government has already announced, a dramatic and catastrophic winter for our customers,” Mr Commaret told BBC Radio 4’s Today programme. “In fact, in January half of the UK households might be in fuel poverty.”

EDF is to contact hundreds of thousands of customers to offer more support, including on how to cut costs. Supermarkets are also stocking more lower-cost items and advising on how to make savings including by using air fryers and slow cookers.

Regulator Ofgem will announce the new level of the price cap on Friday, with energy industry consultants Cornwall Insight warning that households will face an 80 per cent rise in bills going into the winter period.

Bills for millions of households are tipped to spiral from £1,971 now to hit £3,554 from October, and possibly even rise to £5,800 in April.

UK wholesale natural gas prices stayed close to all-time peaks on Tuand well above levels hit in the immediate aftermath of Vladimir Putin’s invasion of Ukraine in February. A unit of natural gas for October delivery was trading at £5.90p a therm at London’s ICE exchange, near the £5.93 peak hit yesterday. Minister for disabled people Chloe Smith admitted the inflation and energy price cap predictions were “worrying figures”.

She said that a new £150 cost-of-living payment for disabled people would prove “really important” and was on top of support of £1,200 for the least well off, and £400 for all households.

However, these figures are dwarfed by the new energy price cap forecasts and Ms Smith was unable to say what work the Government is doing now to tackle the looming economic misery from sky-high bills.

She emphasised that this would be a matter next month for the new Prime Minister, either Liz Truss or Rishi Sunak. But as Europe was gripped by the energy crisis, many countries are already considering steps to reduce consumption and acting to build up gas supplies.

Former Shell director Andy Brown, now chief executive at Portuguese oil and energy company Galp, said: “Every country is now looking at how they reduce demand, and I think again there is something the UK needs to think about very seriously.”

But Ms Smith suggested that the Government would not be offering advice to the public on making savings to get through the coming months.

Appearing on LBC, she was pressed on suggestions from experts about batch cooking and debates in Germany over motorists reducing their speed on motorways. “I don’t think you’ll find the Government giving out tips of that kind,” she said.

John Healey, shadow defence secretary, said Labour would want the price cap frozen over the winter, at a cost of £30 billion for six months.

He told LBC: “People are facing a winter emergency crisis over the next six months ... the crisis is immediate, the need for action is urgent.” Households are said to be in fuel poverty if they are spending more than 10 per cent of their disposable income on their energy bills. The war in Ukraine and the economic isolation of gas-producing Russia, combined with surging energy demand following the easing of pandemic restrictions around the world, has driven up prices and caused uncertainty in international supply.

Downing Street has insisted there is no need for consumers to panic and “households, businesses and industry can be confident that they will get the electricity and gas that they need over the winter”.

But business chiefs were warning that many small firms may struggle to stay afloat as their soaring energy bills are not capped. Latest data today also showed UK private-sector growth has slowed to a new 18-month low after factories were hit by “waning customer demand”.

The closely followed S&P Global/CIPS flash UK composite purchasing managers index (PMI) report showed a reading of 50.9 for August, declining from 52.1 last month. Anything above 50 is considered growth.

Meanwhile, a regular emergency planning exercise to help the UK prepare for a shortage of gas supplies has been doubled in size, the BBC reported.