Energy bills for households in Great Britain are forecast to rise again at the start of January.
Energy consultancy Cornwall Insight said it expects Ofgem to reveal on Friday that energy bills for a typical household on a default tariff will rise by 1%, or £19 a year, to £1,736 from £1,717 on January 1.
Cornwall Insight had previously predicted a 1% fall to £1,697. However, this prediction has now changed, which will come as a blow for many after prices increased by 10% in October.
Cornwall Insight 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.”
The energy price cap, set by Ofgem and updated quarterly, limits the amount suppliers can charge per unit of energy but does not cap total bills, as charges are based on actual usage. The cap applies for households in England, Scotland and Wales.
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.
Craig Lowrey, principal consultant at Cornwall Insight, 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.
“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.”
Prices are still expected to fall slightly in both the second and fourth quarters of next year.
January’s price rise will affect households on a standard variable tariff.
If Cornwall Insight’s forecast is accurate, people can work out how much more they may have to pay in January by adding one percent to their current bill.
Households are being urged to look into fixing their energy tariffs, as it could translate to savings worth an average of £120 a year.
Richard Neudegg, director of regulation at Uswitch.com, commented: “There are now a range of fixed deals available that are significantly cheaper than the predicted price cap for January, so it is well worth running a comparison to see how much you could save.
“Right now, the average household could save up to £120 per year against the current price cap by switching to a fixed deal.”
According to Uswitch, the cheapest 12-month fix on the market is Outfox the Market’s Fix’d Dual Nov24 v1.0 tariff, costing £1,597 a year for typical consumption.
Mr Neudegg added: “Consumers who are worried about paying their energy bill should check what energy help they are eligible for, and contact their supplier who may be able to offer support.”
The new price cap will come into effect on January 1, 2025.