Winter energy bills forecast to drop by just £13 a year - but only after a summer rise

Winter energy bills forecast to drop by just £13 a year - but only after a summer rise Falling wholesale energy costs on the back of Middle East peace deal herald the possibility of lower winter bills for UK households - but not by much Energy bills are forecast to fall slightly ahead of the winter - but only after a summer hike. Regulator Ofgem’s price cap for tens of households will surge by 13% - or £221 a year - to an average £1,862 from July 1. There were fears the cap could rise again when Ofgem next changed it in October because of the fall-out from the Middle East war and a leap in wholesale energy costs. However, those costs have begun to drop thanks to hopes of a lasting resolution to the conflict. Industry experts Cornwall Insight is now forecasting Ofgem’s price cap will fall by 0.5% from October 1, to £1,849 per year. Looking further ahead, it is currently forecasting a slight drop in the cap from January, but its predictions remain above where bills were during the first three months of the year. Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “The Iran ceasefire gave the markets some breathing room, but this is a pause, not a resolution to the conflict. “What comes out of the final agreement, if there is one, will matter enormously for energy prices. And even in the best-case scenario, the enduring effects from the conflict will be with us for a while. Infrastructure takes time to repair, supply chains take time to recover, and households will be left dealing with the consequences for some time.” He added: “October bills always hit harder than July’s because people are turning their heating on again, and this year that coincides with a difficult geopolitical backdrop. “The new Prime Minister will face real pressure to act on support for vulnerable households, but the harder question is what comes after that, currently we are in a perpetual cycle of global shocks, high bills and short-term fixes. “More permanent measures like social tariffs, moving levies into general taxation, or removing VAT on energy bills would take some of the pressure off bill-payers, but there is no firm steer that these options are being actively pursued by Government at the moment.” It came as campaigners warned about the impact of this week’s jump in energy bills. New research from fuel poverty charity National Energy Action reveals how record levels of energy debt mean many households are in “persistent distress”, with money worries shaping their daily routines, leading to worsening health, and reducing their ability to cope or recover. Its analysis shows bad debt and recovery costs are adding around £50 to £70 a year to household bills through the price cap. Adam Scorer, chief executive at National Energy Action, said: “Tomorrow’s cap rise is another blow for millions already struggling. The legacy of the energy crisis is millions of households locked into debt they cannot repay, and that is pushing up bills for everyone. "If we fail to act, we risk seeing more households forced onto prepayment and effectively cut off from energy. That cannot be the answer to a problem caused by unaffordable bills.”