Energy prices expected to rise further in Q1
By Benjamin Chiou
Date: Monday 18 Nov 2024
(Sharecast News) - UK energy prices are expected to rise again in early 2025 to an average £1,736 per household, according to energy consultants Cornwall Insight.
Ahead of a scheduled announcement on prices from Ofgem this Friday, Cornwall Insight's price cap forecast for the first quarter is pointing to a 1% rise from the current annual price cap of £1,717.
The firm said this reflects a relatively "volatile" market for wholesale energy, driven by concerns about supply related to geopolitical tensions, along with maintenance on Norwegian gas infrastructure, weather disruptions and other factors.
"Given the price cap rise in October, many will have been hoping to see a fall in the cap for January. Unfortunately, forecasts show that prices will be staying relatively high for the remainder of winter," Cornwall Insights said.
Looking beyond the first quarter, the firm said it expects the cap to drop slightly in April and then again in October.
The consultancy urged the government to explore measures to protect vulnerable groups from high energy bills, which remain substantially above historic averages.
"Fuel poverty has occupied political agendas for years, with little long-term progress. This winter, millions of households say they will not heat their homes to recommended temperatures, risking serious health consequences," said Craig Lowrey, principal consultant at Cornwall Insight.
"With it being widely accepted that high prices are here to stay, we need to see action. Options like social tariffs, adjustments to price caps, benefit restructuring, or other targeted support for vulnerable households must be seriously considered."
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