- Ofgem chief executive Jonathan Brearley told MPs he expects the energy cap to be “in the region of £2,800” when it is reviewed later this year.
- This is another huge rise for consumers after the energy cap was hiked almost £700 in April to £1,971.
- Russia’s invasion of Ukraine has been a key factor in pushing up energy prices to record highs.
- The rises were described as a once in a generation event.
- The comments will heap further pressure on the chancellor to bring in provisions to help customers already struggling with the surging cost of living.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:
“These comments bring further misery to millions of people already struggling with the soaring cost of living. April’s hike in the energy price cap was hugely unwelcome but many people hoped to curtail their energy usage during summer. However, with another enormous increase on the cards as we head into the winter months many people will be wondering how they will cope.
People have been looking at how they can cut back their spending to meet these rising costs, but they are rapidly running out of options and many face difficult decisions about things as basic as choosing between heating and eating. When the biggest cost increases come from essentials like food and energy there is very little people can do to cut back.
The pressure is now on the government to outline how they are going to help people through this miserable time. Up until now its response has been limited to a council tax rebate and a repayable £200 reduction. These look woefully inadequate in the face of these potential new hikes and a much more robust response will be needed.
There is speculation swirling that the U.K. government could be drawing up a plan for a windfall tax in all but name. This has led to sharp falls in utility and energy focused stocks today, with Centrica falling by 8% and Drax by 15% by mid-afternoon.
The expectation is that the levy under discussion would be linked to so called ‘excess profits’ of energy generators, and not just oil and gas companies.
Consumers have an anxious wait ahead of them to see if the government can indeed rise to the rescue in the difficult months ahead.”