Energy prices to drop by less than expected

Energy research company Cornwall Insight has revised its predictions for energy prices in the summer and autumn following a rebound in wholesale energy prices.

The Ofgem price cap dictates the maximum that energy suppliers can charge on their default tariffs based on wholesale costs. Cornwall Insight attempts to predict this based on movements in the wholesale energy markets. With wholesale prices having increased from the 30-month low that was seen earlier this year, it has revised its price cap predictions up by about 7% for both the summer and autumn quarters.

The firm has therefore increased its prediction for the July price cap to the equivalent of £1,559 per year for the average home, up from its previous prediction of £1,465. From October, this has increased to £1,631 from £1,524. It is then expected to only increase slightly in January to £1,634.

Cornwall Insight’s principal consultant, Dr Craig Lowrey, said about this:

“While no household will want to see forecasts rising, it’s important to recognise that these do still represent a fall from the new cap coming in from April, itself a large drop. So there is every reason to remain optimistic for energy bills moving forward.”

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