Industry experts have warned a rise in energy bills, despite the government price cap.
A new analysis by Cornwall Insight has found that there are cost pressures to increase bills by up to five percent by next April, despite the government promise to protect 11 million households on default tariffs with a cap by the end of this year.
“On the safeguard tariff forecasts, we believe there’s another £60 rise coming in April – mainly due to policy and wholesale cost increases. These rises will be felt by all suppliers regardless of whether tariffs are capped or not,” said Robert Buckley, a research director at Cornwall Insight – the energy consultancy firm.
The increase would take the average bill to £1,268 when consumers are already facing slowing wage growth and rising interest rates.
“There’s a good argument that the cap will make things worse because the formula it uses to set the wholesale cost element is very difficult to replicate in market hedging,” added Buckley.
British Gas (LON: CNA), EDF (EPA: EDF) and E.ON have raised prices twice already this year. Bulb, a challenger firm, told consumers earlier this year that it expects to raise prices for a third time this year due to the heatwave pushing up electricity prices.
SSE (LON: SSE) is the most likely of the big six energy companies to announce the second rise due to its cheap standard variable tariff.
Npower and ScottishPower are less likely to announce the second increase due to their already higher prices.