Britons forecast the biggest jump in energy bills in four years

Millions of households in Great Britain face the strongest increase in gas and electricity bills in four years. According to a new forecast by consulting firm Cornwall Insight, from January the typical annual bill could rise to £1,999.

This is approximately £276, or 16%, more than the level that will be in effect from October 1. British regulator Ofgem has set a price cap for October-December at £1,723 per year for a typical household that uses gas and electricity and pays bills by direct debit. This itself rises by about 4% compared to the previous quarter.

The main reason for the new projected jump is the increase in gas prices after supply interruptions due to the conflict in the Middle East. At the same time, gas reserves in European storage remain low, so countries will have to purchase significant volumes of fuel to restore them. Cornwall Insight warns that because of this, high prices may persist after the end of winter.

The new forecast is not yet the final tariff. Ofgem reviews the price cap every three months and must announce the actual level for January-March at the end of November. A significant part of the period used to calculate the winter tariff, however, has already passed, so Cornwall Insight considers a substantial price increase almost inevitable.

The issue affects approximately 20 million households in England, Scotland, and Wales that use variable tariffs limited by Ofgem's price cap. The actual bill of each family will depend on consumption volumes: the price cap limits not the total bill amount, but tariffs per unit of energy and fixed daily charges.

Additional pressure is created by already accumulated consumer debt. According to Ofgem data cited by the BBC, British customers owe energy suppliers more than £5 billion. Charities are urging the government to provide additional targeted support for the most vulnerable families this winter.

From October 1, the government temporarily zeroes VAT on electricity instead of the current 5%. For a typical household this should save about £45 per year, however this is already outweighed by the increase in market energy prices. EDF Energy CEO Simone Rossi told the BBC that the country is actually approaching a second serious energy crisis in four years, and called for extending the tax break after April.

Based on materials from: BBC, Ofgem, Cornwall Insight