Household energy bills could jump to over £2,900 a year following Russia’s invasion of Ukraine, according to the latest analysis from Cornwall Insight.
The energy specialists forecast that the consumer price cap could be hiked nearly 50 per cent again in October – only six months after prices were raised from £1,277 per year to £1,971.
The forecast gloomily echoes Investec’s prediction that the mechanism could be hiked to £3,000 per year for average users.
Dr Craig Lowrey, senior consultant at Cornwall Insight expected wholesale prices would remain volatile amid escalating fears over supply shortages, and suggested the government would have to consider new measures to reduce pain for households next winter.
He said: “The UK government will need to be ready with ways to mitigate the impact on consumers, with an increase in financial support to households likely to be a necessity, in addition to renewed considerations on support to business customers.”
Following the announced price hike in April, the government unveiled a £9bn rebate scheme, which could provide up to £350 annual savings to lower income households.
Ofgem has also announced a series of financial reforms to the UK energy sector, such as hedging controls and financial stress tests.
This comes after 29 suppliers have collapsed in the domestic market since August, directly affecting over four million customers.
Bulb Energy – the country’s seventh biggest energy firm – dropped into de-facto nationalisation, and has been propped up by nearly £2bn in public funds.