In a statement, Jonathan Brearley, CEO of Ofgem, said: “We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.”
He continued: “The price of energy has reached record levels driven by an aggressive economic act by the Russian state.
“They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.
“We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action.
“The response will need to match the scale of the crisis we have before us.
“With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Whilst the 80 percent increase on the price cap since the previous quarter will already terrify bill-payers, energy prices are only expected to soar further.
Ofgem price cap from January 2023
Energy cost analysts at Cornwall Insight have forecast the price cap to increase to £5,386.71 on January 1, 2023 and £6,616.37 on April 1, 2023.
The Cornwall Insight team called upon the government to protect consumers and think longterm about the energy system, saying: “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.
“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.
“Today should be seen as a wake-up call to policy makers that short-term thinking and triage of the energy system is not enough.
“Without real change to the energy system in this country, it is consumers, suppliers and the economy that will all continue to suffer the consequences.”
Chancellor Nadhim Zahawi said today: “Help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support.
“This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
Amid the news, many will be wondering whether they should opt for a fixed rate tariff, or switch providers for other outgoings to save money.
Helene Barnes, cost of living expert at Comparethemarket, said: “During these difficult times, it is important people actively manage all aspects of their finances and look for savings wherever possible.
“It might be possible to cut back on things such as monthly subscriptions or certain bills, such as motor and home insurance.”
She said comparing policies online is “one of the best ways” to check people are getting value for money.
Ms Barnes continued: “By comparing, motorists could save up to £324 on average by switching from their existing insurance provider, and for those with home insurance there could be savings of up to £148 by switching their buildings and contents insurance.
“The Government’s £400 grant this October will also help all households combat soaring energy prices, with a higher £650 payment available to provide specific support for households on the lowest levels of income.”
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