Martin Lewis has warned that the energy price cap could skyrocket by a further £1,000 at the beginning of October, after a new forecast was released on Monday.
The cap could rise to around £2,980.63 for the next period – which runs between October and December, Cornwall Insight has said.
Currently, it is £1,971 – already a record which beat the previous high by 54%. Previous estimates of the autumn energy cap put it £2,800.
On Twitter, the consumer expert said: “Just got latest @CornwallInsight price cap predictions. Wholesale prices spiked heavily last week, so they’re up a lot.
“Today’s price cap: At typical use = £1,971/yr Prediction Oct – Dec: UP 51% (£2,980/yr typical use) Prediction Jan – Mar: UP 1% (£3,000/yr typical use)”.
For the next period, between January and March 2023 the energy cap will further rise to £3,000 per year, Cornwall Insight indicated. It suggests high prices are here to stay for some time for British households.
The rapidly increasing energy cap prompted action from chancellor Rishi Sunak who last month annnounced a £15bn cost-of-living support package that included doubling a planned rebate on fuel bills from £200 to £400.
Energy prices on wholesale markets have been soaring over the past year. The increases were at first caused by high demand as global economies reopened following the Covid-19 pandemic.
However, Russia’s war on Ukraine has caused prices to spike even further as countries have tried not to buy natural gas from Vladimir Putin’s regime over concerns it could be used to fund the unprovoked conflict.
The crisis has also reduced the number of energy suppliers on the market to just over 20, while competition has been destroyed. No suppliers are able to offer a price below the cap‘s level.
The pricecap is already worse for customers than it has ever been. For an average household, the price of energy increased from £1,277 to £1,971 in April.
Previously, the price had been as low as £1,042 in the summer of 2020 – the cheapest since the policy first came into force in 2019.
Additional reporting by PA
