What will happen to UK energy bills in April?
Uncertainty over who will receive support amid predictions of costs rising to £5,000 a year
Households are facing average energy bills as high as £5,000 from April following Liz Truss’s latest policy U-turn.
Under the government’s energy price guarantee, a typical household using both gas and electricity would have paid £2,500 annually for two years.
However, Chancellor Jeremy Hunt announced yesterday that the guarantee will finish next April, with a review being launched on how to support consumers after that.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The government said its new policy will “cost the taxpayer significantly less than planned” and will target those most in need of support.
Speculation is already underway on where this will leave energy bills in the spring. Ofgem, the regulator, has yet to set a cap for April, but the consultancy Auxilione “predicts that average bills could hit £5,078”, according to The Times. Other forecasters’ predictions are lower: RBC Capital Markets expects £4,684 a year, the Resolution Foundation £4,000 and Investec £3,923.
Meanwhile, tweeted Samuel Tombs, chief UK economist at Pantheon Macroeconomics, if Hunt lets Ofgem set the price cap again from April, “then current wholesale prices point to a 73% jump in energy bills, to £4,334, for those no longer receiving any support”.
There is uncertainty about who will receive support from April. The U-turn on energy “was of course forced by turmoil in the markets”, wrote Helen Thomas in the Financial Times, but the change of plan means “it is entirely unclear who will be supported, at what prices and in what way come spring”, she added.
National Energy Action told Sky News that ending the energy guarantee after six months is an “almighty trade-off” that has already caused “huge uncertainty”.
The fuel poverty charity’s chief executive Adam Scorer said: “Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.”
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
5 high-caliber cartoons about Kristi Noem shooting her puppy
Cartoons Artists take on the rainbow bridge, a farm upstate, and more
By The Week US Published
-
The Week Unwrapped: Why is the world running low on blood?
Podcast Scientists believe universal donor blood is within reach – plus, the row over an immersive D-Day simulation, and an Ozempic faux pas
By The Week Staff Published
-
Rishi Sunak's asylum spat with Ireland explained
In Depth Irish government plans to override court ruling that the UK is unsafe for asylum seekers
By The Week UK Published
-
Liz Truss to save the West: is a political comeback really on the cards?
Talking Point The former prime minister is back with a new tell-all memoir
By Richard Windsor, The Week UK Published
-
Will Aukus pact survive a second Trump presidency?
Today's Big Question US, UK and Australia seek to expand 'game-changer' defence partnership ahead of Republican's possible return to White House
By Sorcha Bradley, The Week UK Published
-
Liz Truss and her bid to woo the American far-right
Why Everyone's Talking About Former PM pitching herself as 'bridge in transatlantic conservative movement'
By The Week UK Published
-
It's the economy, Sunak: has 'Rishession' halted Tory fightback?
Today's Big Question PM's pledge to deliver economic growth is 'in tatters' as stagnation and falling living standards threaten Tory election wipeout
By Harriet Marsden, The Week UK Published
-
Why your local council may be going bust
The Explainer Across England, local councils are suffering from grave financial problems
By The Week UK Published
-
Rishi Sunak and the right-wing press: heading for divorce?
Talking Point The Telegraph launches 'assault' on PM just as many Tory MPs are contemplating losing their seats
By Keumars Afifi-Sabet, The Week UK Published
-
Fiscal headroom: can the UK afford more tax cuts?
Today's Big Question Lower borrowing costs could give the Chancellor more room for manoeuvre in upcoming Budget
By Sorcha Bradley, The Week UK Published
-
How would a second Trump presidency affect Britain?
Today's Big Question Re-election of Republican frontrunner could threaten UK security, warns former head of secret service
By Harriet Marsden, The Week UK Published