Ofgem has made its latest announcement on energy price cap changes and thankfully we will start to see a reduction in bills from the 1st of July 2023 for the first time since the start of the energy crisis. This will lead to drop a inflation overall and is the first sign that the cost of living will ease for many households across the UK.
What will energy prices be from July 2023?
The energy price cap will be cut by nearly a fifth as the energy price cap will be £2074 down from the £2500 energy price guarantee set by the government. This will mean the average consumer will pay £172.84 per calendar month.
| April price cap | July price cap | |
|---|---|---|
| Price cap level | £3,280 | £2,074 |
| What customers pay on average*(with Energy Price Guarantee) | £2,500 | £2,074 |
The energy price guarantee will come to an end and consumers will rely on ofgems price cap going forwards, this will mean less government spending and the likelihood that energy companies will be able to offer better deals for current and future consumers rather than set tariffs which is better for you and better for market competition.
What will energy prices be going forwards?
The next price cap is set to be announced by Ofgem on the 25th of August 2023 and will be applicable from the 1st of October. Cornwall insights who provide expert analysis on energy prices believe we will only see a small drop to £1960, however they have also indicated they believe prices could go up again in 2024 if we have an extremely cold winter to £2026.
This means that energy prices will continue to be much higher than before the energy crisis started when Russia invaded the Ukraine however energy prices stand a good change of declining in summer 2024, but this will very much depend on wholesale prices continuing to drop and inflation being curbed.
What does this mean for businesses?
Businesses aren’t subject to an energy price cap however as wholesale prices continue to drop, businesses will start to see a reduction in bills which should stop massive price increases on food and consumer goods going forwards but we still have some time to go before we will start to a see a difference.
Will energy prices drop to pre crisis levels?
Unfortunately it is highly unlikely prices will ever return to pre crisis levels, however we will see less strain on our wallets due to increased income levels from benefits and salaries. Thankfully we will get to a point where we won’t notice the bills and we can all live more comfortably but I would not expect a considerable fall in prices until Summer 2025.
Thanks for reading get our latest updates by joining our mailing list – Money Lad
Subscribe to our newsletter!
Leave a Reply