Brits are facing another rise in energy bills in the New Year amid warnings prices are not going back to pre-Covid levels.
Hopes that Ofgem‘s cap could edge lower in January look set to be dashed, with a formal announcement due this week.
Cornwall Insight said it expects the typical household’s energy bill to go up 1 per cent from £1,717 to £1,736.
It follows a painful 10 per cent price rise in October.
Millions of pensioners are also facing a winter with less support, after Labour scrapped winter fuel allowance for all but the poorest.
About 10million will miss out on the payments of up to £300 this year.
Cornwall Insight had previously pencilled in a 1 per cent fall to £1,697, but said this was now no longer the case.
It uses Ofgem’s methodology to produce the figures, and has a track record of getting them right. The official numbers will be released on Friday.
The firm said: ‘Given the price cap rise in October, many will have been hoping to see a fall in the cap for January.
‘Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter.’
Prices are still expected to fall slightly in both the second and fourth quarters of next year, according to Cornwall Insight.
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets, with the regulator confirming the level for the first quarter of next year on November 22.
The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
It does not limit total bills, because householders still pay for the amount of energy they consume.
While the cap is significantly lower than at the peak of the energy crisis, which was fuelled by Russia’s invasion of Ukraine in February 2022, prices are still ‘very sensitive to global events’ and supply concerns tied to geopolitical tensions, Cornwall Insight said.
Principal consultant Craig Lowrey said: ‘Supply concerns have kept the market as volatile as earlier in the year and additional charges have remained relatively stable, so prices have stayed flat.
Keir Starmer has been under pressure over the decision to scrap winter fuel allowance for millions of pensioners
Ofgem is due to make its official announcement of the cap on Friday (file picture)
‘While we may have seen this coming, the news that prices will not drop from the rises in the autumn will still be disappointing to many as we move into the colder months.’
He called for the Government to help protect the vulnerable and tackle energy supply for the long-term.
Mr Lowry said: ‘With it being widely accepted that high prices are here to stay, we need to see action.
‘Options like social tariffs, adjustments to price caps, benefit restructuring or other targeted support for vulnerable households must be seriously considered.’
He added: ‘The Government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now.
‘Inaction is a choice to leave people in the cold.’
Ofgem is also currently considering the future of price protection, including the suitability of the price cap and a potential permanent ban on so-called acquisition tariffs – cheaper prices for new customers to lure them away from their existing supplier.