MILLIONS of households in the UK will see higher energy bills from April as regulator Ofgem announced a 6.4 per cent increase in the domestic price cap. The rise is driven by higher wholesale energy costs.
This marks the third consecutive quarterly increase and comes as a setback for the government, which has pledged to lower energy bills.
The announcement follows higher-than-expected inflation figures for January.
Under the new cap, the average annual energy bill for electricity and gas will be £1,849, an increase of £111 from the previous cap of £1,738.
British gas prices reached a two-year high in early February due to cold weather leading to increased withdrawals from gas reserves in Britain and Europe.
The situation was further impacted by the expiry of a deal to supply Russian gas via Ukraine at the end of last year.
Wholesale gas and power prices play a key role in Ofgem’s price cap calculations.
Energy secretary Ed Miliband said the government is working to reduce dependence on costly fossil fuels and is offering support through the Warm Home Discount, which provides £150 per winter to eligible households on benefits.
“Alongside this, the way to deliver energy security and bring down bills for good is to deliver our mission to make Britain a clean energy superpower – with homegrown clean power that we in Britain control,” he said.
Britain aims to decarbonise its electricity sector by 2030 and reduce reliance on gas, which currently accounts for about a third of its power generation.
Campaign groups have urged the government to provide more assistance to vulnerable households, suggesting measures like a social tariff or a help-to-repay scheme for customers struggling with debt.
Analysts at Cornwall Insights estimate that based on current wholesale energy prices, the cap could decrease to £1,756 in July. However, they cautioned that market volatility could lead to changes before the next cap level is set.
(With inputs from Reuters)
Bags of rubbish and bins overflow on the pavement in the Sparkbrook area on June 02, 2025 in Birmingham, England. (Photo by Christopher Furlong/Getty Images)
