BFY Group, a utilities consultancy, said households could see energy bills of £500 for the month of January alone. The cap is set to rise to £3,420 in October – well above the £2,800 figure forecast by Ofgem, the energy regulator, in May. Households are already paying £1,971 a year on energy bills after the price cap rose in April – this would equate to a 74% rise in the autumn. Cornwall Insight, another energy research specialist, had an even tougher forecast of £3,500 in October, with bills expected to remain above that level until 2024. The latest analysis takes into account the impact of Russia’s decision to cut its natural gas flow to Europe to just 20% of Nord Stream 1 pipeline capacity, which has pushed up wholesale prices. There are fears that this will worsen further if Russia cuts off supplies completely. The UK imports less than 5% of its natural gas from Russia – and has pledged to phase out imports by the end of the year – but is affected by fluctuations in global markets. The energy price cap was previously updated twice a year, but will now be reviewed every three months. It is based on the average cost of energy in the previous months. Analysts say the picture could change by January, but they already have most of the data they need to accurately predict an October rise. Based on typical consumption levels, households can expect to see energy bills of more than £250 in October, more than £350 in November and more than £425 in December. Use Chrome browser for more accessible video player 11:57 UK energy prices to rise further In February and March the cost could reach over £450 and £400 respectively. The expected rise in the price cap in January would put more than half of UK households into fuel poverty. Until recently, a household was officially considered to be in fuel poverty if it spent more than 10% of its income on energy. The definition is still widely used. To avoid fuel poverty in January, a household would need to be earning £38,500 – but the average after tax is just £31,400 a year.
