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The energy price cap is set to be lowered on Thursday to boost households facing inflation in other goods and services.
With the government set to end subsidies on energy bills from July, Ofgem’s price cap is expected to fall below the level Jeremy Hunt has spent billions of pounds of public money to sustain. be done.
But the gains to households remain small compared to the hits facing other forms of inflation, especially food.
Price caps set by regulators are the maximum amount gas and electricity providers can charge the average home, but the exact level of billing depends on usage.
Cornwall Insights expects the new level to take effect in July to be £2,054. That’s a big drop, but it’s still far above what it was before Russia’s invasion of Ukraine.
The Prime Minister agreed to keep average bills below £2,500 through individual energy price guarantees, allowing the state to pay suppliers directly to ensure prices remain at that level. The price cap is set below the Energy Price Guarantee, so the Treasury will no longer have to subsidize the bill.
The average household will benefit from £37 a month when the new price cap is introduced. By comparison, food prices have increased by about £70 a month over the past year.
“What we are doing is taxing the windfall profits of energy companies and using that money to pay about half of the utility bills of ordinary households,” Rishi Sunak told MPs. is worth £1,500.It has been extended by the Prime Minister in his Budget and we are all looking forward to lower energy bills and hope that will come soon.”
But Labour’s shadow prime minister, Rachel Reeves, said: “As bills continue to climb, families will worry that food prices and other essentials will continue to rise.” They will ask why the Conservative government still refuses to adequately address this cost of living crisis and why it will not introduce a proper windfall tax on the huge profits of the oil and gas giants. right. ”
Energy prices are widely believed to be the cause of the spike in inflation in the UK and around the world, forcing businesses to raise prices on a range of products as their own costs rise.
Global wholesale natural gas prices, which tend to impact all other energy benchmarks, fell unexpectedly and sharply, making the nightmare scenario of widespread shortages across Europe over the winter a reality. I didn’t.
