Energy bills to soar for millions as price cap hiked to £3,549
Millions of households will see their energy bills rocket as the price cap is hiked to £3,549 a year, plunging many into financial hardship.The record 80% hike in October, announced by the regulator Ofgem, will see a typical default tariff customer paying an extra £1,578, laying bare the deepening cost of living crisis.
The rise follows a 54% increase in April, which saw average bills surge to £1,971 a year.Bills set to soar after price cap announcement – live updatesIn all, around 24 million households will be hit by the price spike.
Ofgem chief executive Jonathan Brearley 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.”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.
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“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.
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“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.”Read more:What is the energy price cap?Soaring wholesale gas costs – fuelled by Russia’s invasion of Ukraine – have driven the energy price cap increase, which is widely expected to spiral even further next year.It ramps up the squeeze on households already wrestling with soaring food and fuel prices.Sky News has found that a third of households are already struggling to pay their energy bills.The sharp rise will further add to inflation, which the Bank of England is forecasting will hit 13% in the autumn, having already reached a 40-year peak of 10.1% in July.It increases the likelihood of another interest rate rise, adding to the cost burden of many hard-pressed households. Subscribe to the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, SpreakerThere had already been widespread calls for the government to urgently increase support to help people cope with the cost crunch and these will only mount ahead of the impending hike in bills.All households have been promised £400, with more for the vulnerable, but this will be dwarfed by the latest rise.When the government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October.Read more: Everything you need to know about higher billsLabour, the Liberal Democrats and most major energy suppliers have proposed plans to freeze prices at current levels to ease the immediate pressure on households.But Boris Johnson has stressed he will leave major decisions on additional support to his Downing Street successor, who will not be announced until 5 September after the Tory leadership contest.Frontrunner Liz Truss has promised to cut green levies while her rival Rishi Sunak has pledged to remove VAT from energy bills.Responding to the price cap increase, Chancellor Nadhim Zahawi said: “I know the energy price cap announcement this morning will cause stress and anxiety for many people, but 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.”Liberal Democrat leader Sir Ed Davey said: “The only option is for energy prices to be frozen before these rises wreak havoc on our communities. Then we need a proper plan to be put in place to bring bills down next year.”As millions suffer the Conservatives do nothing. No policy from the government, no plan from Liz Truss or Rishi Sunak.”They have no idea how much pain these energy prices will cause our country. They are simply unfit to govern.”
Millions of households will see their energy bills rocket as the price cap is hiked to £3,549 a year, plunging many into financial hardship.
The record 80% hike in October, announced by the regulator Ofgem, will see a typical default tariff customer paying an extra £1,578, laying bare the deepening cost of living crisis.
The rise follows a 54% increase in April, which saw average bills surge to £1,971 a year.
Bills set to soar after price cap announcement – live updates
In all, around 24 million households will be hit by the price spike.
Ofgem chief executive Jonathan Brearley 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.
“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.”
Read more:
What is the energy price cap?
Soaring wholesale gas costs – fuelled by Russia’s invasion of Ukraine – have driven the energy price cap increase, which is widely expected to spiral even further next year.
It ramps up the squeeze on households already wrestling with soaring food and fuel prices.
Sky News has found that a third of households are already struggling to pay their energy bills.
The sharp rise will further add to inflation, which the Bank of England is forecasting will hit 13% in the autumn, having already reached a 40-year peak of 10.1% in July.
It increases the likelihood of another interest rate rise, adding to the cost burden of many hard-pressed households.
Subscribe to the Daily podcast on?Apple Podcasts,? Google Podcasts,? Spotify, Spreaker
There had already been widespread calls for the government to urgently increase support to help people cope with the cost crunch and these will only mount ahead of the impending hike in bills.
All households have been promised £400, with more for the vulnerable, but this will be dwarfed by the latest rise.
When the government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October.
Read more: Everything you need to know about higher bills
Labour, the Liberal Democrats and most major energy suppliers have proposed plans to freeze prices at current levels to ease the immediate pressure on households.
But Boris Johnson has stressed he will leave major decisions on additional support to his Downing Street successor, who will not be announced until 5 September after the Tory leadership contest.
Frontrunner Liz Truss has promised to cut green levies while her rival Rishi Sunak has pledged to remove VAT from energy bills.
Responding to the price cap increase, Chancellor Nadhim Zahawi said: “I know the energy price cap announcement this morning will cause stress and anxiety for many people, but 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.”
Liberal Democrat leader Sir Ed Davey said: “The only option is for energy prices to be frozen before these rises wreak havoc on our communities. Then we need a proper plan to be put in place to bring bills down next year.
“As millions suffer the Conservatives do nothing. No policy from the government, no plan from Liz Truss or Rishi Sunak.
“They have no idea how much pain these energy prices will cause our country. They are simply unfit to govern.”