22 January: Red Sea Strife Not Likely To Hit Domestic Bills
Energy bills for households with typical gas and electricity usage could fall in 2024 despite potential disruption to supplies because of international conflicts according to analysis from Cornwall Insight, writes Brean Horne.
The energy price cap set by the market regulator, Ofgem, rose by 5% on 1 January, reaching £1,928 for an average household, but analysts Cornwall Insight says the cap will fall to £1,620 from 1 April 2024, giving a potential saving of £308 per year.
It expects prices to fall again to £1,497 per year in July before increasing to £1,541 in October.
The cap is changed each quarter to reflect movements in wholesale prices, which have fallen since November thanks to higher-than-expected European gas stocks and benign global supply conditions.
The cap limits what suppliers can charge for each unit of energy consumed and in standing charges. It is not a cap on bills, which will always reflect usage.
Typically, energy prices are volatile and subject to fluctuations due to a wide range of factors including geopolitical events and supply issues.
Despite concerns about natural gas supplies being affected by military activity in the Red Sea, the UK remains well stocked thanks to imports from the United States.
Dr Craig Lowrey at Cornwall Insight said: “Concerns that events in the Red Sea would lead to a spike in energy bills have so far proved…
