UK household energy bills are forecast to jump 16% in January, the steepest rise in four years, as disrupted gas supplies from the Middle East conflict keep European storage levels low. The increase follows a 4% rise already taking effect under Ofgem's October price cap, and EDF's chief executive says the country is heading toward a second energy crisis.
Consultancy Cornwall Insight forecasts a typical annual UK household energy bill will rise 16% in January, to £1,999, up £276 from current levels. The projected increase would mark the largest jump in four years and would land during the coldest stretch of winter.
Gas supply disruption drives the forecast
Cornwall Insight attributes the predicted rise to disruption of gas supplies caused by the conflict in the Middle East, which has left natural gas storage levels in Europe low. Rebuilding those stocks could keep bills elevated well beyond the winter, according to the forecaster.
Principal consultant Craig Lowrey said the rise would hit households at a difficult moment, since January is already a hard month for many, with cold weather and bank balances still recovering from Christmas. With little sign of a truce or lower international energy costs, he said a January increase looks all but certain.
October price cap already pushing bills higher
About 20 million households in England, Scotland and Wales sit on variable tariffs set by Ofgem's price cap. Those households will see a 4% increase from Thursday, equal to about £60 a year, taking a typical annual bill to £1,723 for a household paying by direct debit. That rise would have been steeper without the government's VAT cut, which knocks roughly £45 a year off the typical bill.
EDF warns of a second crisis
EDF chief executive Simone Rossi told the BBC the UK is "walking into a second significant energy crisis" and called for the VAT cut on electricity to be extended beyond its planned expiry in April. He also urged ministers to approve the Jackdaw gas field off Aberdeen and the Rosebank oil field off Shetland.
Ofgem data show customers collectively owe more than £5 billion in unpaid bills and charges to suppliers. National Energy Action chief executive Adam Scorer said the situation is unsustainable for households and the market alike, and called for the Budget to deliver targeted support for those most at risk this winter.
Source: BBC News
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