Households will suffer an eye-watering £700 hike to their energy bills this spring, after the market regulator Ofgem raised the consumer price cap yesterday by a record 54 per cent.
The consumer price cap, which limits what suppliers can charge to consumers, will increase to nearly £2,000 per year from April, exacerbating the cost-of-living crisis.
Ofgem’s chief executive Jonathan Brearley recognised the increased prices “will be extremely worrying for many people”, with 22m households on the default tariff directly affected.
The gloomy update to the price cap follows widespread industry carnage, with dozens of suppliers exiting the energy market following the lethal combination of soaring wholesale prices and clumsily imposed limits on what they can charge consumers.
While the price cap remains unreformed, Downing Street has swooped into soften the blow for UK households by once again reaching into the public purse.
Chancellor Rishi Sunak yesterday unveiled a £9bn package of state-backed loans, with every household offered a £200 rebate on their energy bills from October, which will be paid back in five £40 installments over the next five years.
It will also fund a £150 council tax rebate for all properties in bands A to D – which represents around 80 per cent of the population.