Martin Lewis warns of 'bloody awful' increase in energy bills

Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London. (Photo by Kirsty O'Connor/PA Images via Getty Images)
The energy price cap is set to increase by around £800 this autumn. (PA Images via Getty Images)

Britons have been warned they face a "bloody awful" increase in energy bills as it emerged they are set to rise by around £800 a year later this year.

Jonathan Brearley, chief executive of energy regulator Ofgem told a committee of MPs on Tuesday that the energy price cap, which limits how much providers can raise prices, is expected to increase to £2,800 a year in October.

Financial journalist and broadcaster Martin Lewis, founder of the consumer website Money Saving Expert, said the rise would be "bloody awful" for customers.

He tweeted: "The Ofgem Chief Exec has told MPs the price cap will rise 42% in Oct putting typical use to £2,800/yr.

"I'm glad he's been open about this, I asked last week for them to publish forward guidance.

Watch: Ofgem boss warns energy price cap to rise in October

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"This is higher than analysts predictions of £2,600 (both bloody awful though)."

Brearley told MPs the regulator is expecting an energy price cap in October “in the region of £2,800”.

He told the Business, Energy and Industrial Strategy Committee: “I am afraid to say conditions have worsened in the global gas market since Russia’s invasion of Ukraine.

"Gas prices are higher and highly volatile. At times, they have now reached over 10 times their normal level.

“I know this is a very distressing time for customers but I do need to be clear with this committee, with customers and with the government about the likely price implications for October.

“Therefore, later today I will be writing to the chancellor to give him our latest estimates of the price cap uplift.

“This is uncertain; we are only part way through the price cap window, but we are expecting a price cap in October in the region of £2,800.”

File photo dated 03/02/22 of a gas hob burning on a stove in a kitchen in Basingstoke, Hampshire. The Government must take urgent action and help the poorest households months before energy bills will rise again ahead of the winter months, the boss of a major energy company has said. Issue date: Monday May 9, 2022.
Consumers are to be hit with even greater price rises this autumn. (PA)

Ofgem’s prediction is a huge leap on April’s price cap increase of 54%, or an increase of £693 a year to £1,971 for those on default tariffs paying by direct debit for the average household.

Brearley warned future scenarios could include energy prices going even higher if Russia further disrupts gas supplies.

He said: “The price changes we have seen in the gas market are genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s.”

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “This news will be utterly devastating for the 6.1 million homes currently in fuel poverty - and for the additional 1.7 million households who will now spend this winter struggling to keep themselves warm.

“Fuel poverty becomes a public health emergency in winter and the hidden cost of the UK government’s continued inaction will be felt in a collapse in the mental health of those in fuel poverty, increased pressure on the NHS from those with health conditions affected by damp properties and excess winter deaths caused by cold homes.

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“Unless the government acts now, it will have blood on its hands this winter.

“The government must urgently impose a windfall tax on energy production firms to help those most in need, invest in a Great Homes Upgrade to improve energy efficiency of buildings and deliver a renewable-led secure energy infrastructure.”

The prime minister’s official spokesman said on Tuesday that some of the help from the government was “phased throughout the year”.

He said: “Some of the support is designed to come in in October, £200 will be discounted from energy bills, the warm home discount will increase to £150 and be expanded to cover three million people, cold weather payments and winter fuel payments will be available again."