Energy bill increases could hit 61%
Predicted further energy price rises of up to 40% this year could mean a total increase of 61% since January 2008, according to uSwitch.
It would mean the average household energy bill hitting £1,467 this winter, up from £912 at the beginning of the year. The increase in energy prices would also plunge an extra 1.6 million into fuel poverty, taking the total to 6.1 million, a 36% increase.
The bad news is that the spike in energy prices does not look like a temporary situation and consumers will have to adjust to paying far more for their gas and electricity.
According to the Bank of England, wholesale gas prices have increased by 160% in the year to May. But unfortunately suppliers haven’t caught up with the increase in prices as they have yet to pass these on to consumers. Any respite from a downward trend in prices as demand drops during the summer months has, as yet, failed to materialise.
Ann Robinson, director of consumer policy at uSwitch, said: “The days of cheap energy are over. Households could see the largest ever increase in household energy bills this year.
“This is going to cause huge financial pressure and consumers will naturally expect their salaries to increase to help them meet the spiralling costs of living and working in Britain. The Government knows that this will simply exacerbate the situation, but it will have one hell of a battle on its hands trying to dampen down wage expectations. The outlook is grim.
“Consumers cannot afford to ignore this – they need to take action now to stand any chance of limiting the impact of higher prices. However, the best fixed and capped deals are disappearing fast so consumers need to act quickly.”