In its latest set of predictions, energy research firm Cornwall Insight has predicted that regulator Ofgem will slightly lower its price cap for the first quarter of 2025.
The price cap is set by Ofgem on a quarterly basis to determine the maximum that energy suppliers can charge their customers on default tariffs. While it takes into account a range of factors, wholesale energy prices are the main driver of any variations. Cornwall Insight uses a similar methodology but takes early data from the wholesale markets to make its predictions.
It had predicted a slight rise in the New Year, but this has since been revised down to £1,697 per year for the average UK dual-fuel household, a drop of about 1% from the current £1,717. Cornwall Insight says this is due to confidence about energy imports, a good global outlook for the supply of LNG, and the EU meeting its targets early for gas storage. Principal Consultant Dr Craig Lowrey said:
“There remain a further six weeks or so for the wholesale market to influence our forecasts, and while the negligible quarter-on-quarter drop is welcome, it must be remembered that bills will still remain hundreds of pounds above historic levels.”
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