Tuesday 9 August 2022 12:04 PM Energy bills to hit over £4,400 in April trends now

Tuesday 9 August 2022 12:04 PM Energy bills to hit over £4,400 in April trends now
Tuesday 9 August 2022 12:04 PM Energy bills to hit over £4,400 in April trends now

Tuesday 9 August 2022 12:04 PM Energy bills to hit over £4,400 in April trends now

Energy bills are set to hit £4,200 in January with the price cap more than doubling before costs for the average household hit £4,400 by April, according to a dire new forecast today.  

Cornwall Insight said that bills are set to increase to around £3,582 in October, from £1,971 today, before rising even further in the New Year.

Ofgem is set to put the price cap at £4,266 for the average household in the three months from the beginning of January. The energy consultancy said that this was around £650 more than its previous forecast.

Energy bills and the cost of living has become a major issue in the Tory leadership race, with Rishi Sunak vowing to help families to get through an 'extremely tough' winter direct support, while his rival Truss is resisting any 'handouts'. 

Mr Sunak said that if he became prime minister, he would extend the package of support he announced earlier this year, which gave every household £400 off their energy bills, while those on means-tested benefits received a further £650. 

Cornwall Insight said that bills are set to soar to around £3,582 in October, from £1,971 today, before rising even further in the New Year

Cornwall Insight said that bills are set to soar to around £3,582 in October, from £1,971 today, before rising even further in the New Year

'People need proven methods that will deliver for them quickly. So I will use the framework I created to provide further support and give millions of people the peace of mind they desperately need ahead of the winter,' the former chancellor said.

Mr Sunak said: 'In order to keep any one-off borrowing to an absolute minimum I will first seek efficiency savings across Whitehall to provide direct support for families to help with the unprecedented situation we face.' 

But a Truss campaign source said Mr Sunak had 'changed his position on cost of living two or three times in the space of a few weeks'.

'Three weeks ago he was saying more borrowing was irresponsible and inflationary. Has he changed his mind? It's a mammoth strategic U-turn.'

Truss supporter Javid warns her 'more needs to be done' amid 'handouts' row 

Liz Truss has been warned that the country's poorest need more help to deal with the cost-of-living crisis by one of her most high-profile supporters.

Ex-chancellor Sajid Javid went public with a sift rebuke to the Foreign Secretary over comments she made to the Financial Times last week.

She suggested there would be no 'handouts' for families amid spiralling bills and prices on the high street, but she would go ahead with tax cuts.

Mr Javid told the i that she had the best economic plan for long-term improvements to livign standards,

But he added: 'All serious politicians recognise that although lots has been done already, more needs to be done. There is just no way to mitigate the impact on everyone in every single way.'

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Ofgem last week announced changes to how it will calculate the price cap on energy bills going forward.

'While our price cap forecasts have been steadily rising since the summer 2022 cap was set in April, an increase of over £650 in the January predictions comes as a fresh shock,' said Craig Lowrey, principal consultant at Cornwall Insight.

'The cost-of-living crisis was already top of the news agenda as more and more people face fuel poverty - this will only compound the concerns.

'Many may consider the changes made by Ofgem to the hedging formula, which have contributed to the predicted increase in bills, to be unwise at a time when so many people are already struggling.'

However, he also defended Ofgem's decision, which will hopefully lead to lower bills in the second half of next year.

This will happen because Ofgem is making it easier for energy suppliers to recover their costs. By doing this, fewer suppliers will fail - and the cost of those failures will not need to be passed on to customers.

'With many energy suppliers under financial pressure, and some currently making a loss, maintaining the current timeframe for suppliers to recover their hedging costs could risk a repeat of the sizable exodus seen in 2021,' Mr Lowrey said.

'Given that the costs of supplier failure are ultimately met by consumers through their energy bills, a change which means that this is less likely is welcome, even if the timing of it may well not be.'

Part of the increase in the forecast is also due to rising wholesale energy prices, Cornwall said.

The price cap forecasts from Cornwall showed bills reaching £4,427 in April, before finally dropping slightly to £3,810 from July and £3,781 from October next year.

Dr Lowrey said that the Government must take action to step in and protect households from the runaway costs.

The Bank of England has predicted that inflation will reach 13% in the coming months

The Bank of England has predicted that inflation will reach 13% in the coming months

The Government has already promised £400 to every household, and extra help for the more vulnerable.

'If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now,' Mr Lowrey said.

He said that the current price cap is not controlling consumer prices and damaging suppliers' business models, and asked if it was fit for purpose.

Rise of the energy martyrs as 75,000 people support campaign urging households to stop fuel payments over soaring costs 

By Sean Poulter for the Daily Mail  

Thousands of ‘energy bill martyrs’ including a Church of England curate say they will stop their payments this winter as forecasts showed bills could surge to £4,700 a year.

Up to 75,000 have pledged support to Don’t Pay UK, a civil disobedience campaign urging people to cancel energy bill direct debits.

At the same time, a poll shows rising anger

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