Following the introduction of the energy price cap at the start of the year, Nolan has warned that the price cap level is set to rise in just a few months’ time.

He said consumers should prepare to pay more when the price cap is adjusted in line with wholesale prices in April, The Guardian has reported.

“Wholesale costs have risen significantly over the past year. As a result it is likely we will announce an increase, potentially a significant one, on the level of the cap,” he told an audience in London.

Peter Earl, head of energy at comparison site comparethemarket, responded: “People need to know that the price cap is a safeguard measure only, designed to protect households from the worst excesses of highly priced standard variable and default tariffs,” said

“However, it is fundamentally uncompetitive when compared to the majority of fixed tariffs. 60% of fixed rate dual fuel tariffs are cheaper than the current level of the cap, with the top 10 best deals saving households £183 on average.”

The energy price cap came into force at the start of the year. It applies to default tariffs and aims to prevent energy providers from charging more than £1,137 for a typical duel fuel tariff. The cap will be in place until 2020.

Research from Which? has shown that the impact of the price cap has been counter-intuitive: cheap energy deals fell by 90% ahead of the introduction of the price cap.