Commenting on today’s announcement of the October Price Cap being set at £3,549 for a typical user, Dr Craig Lowrey, Senior Consultant at Cornwall Insight said:
“The rise in the Default Tariff Cap (price cap) was unfortunately inevitable, as UK bills continue to be the victim of an unstable and unpredictable global market. While there is still a long time until the January and April caps are set, the energy crisis is showing no sign of abating.
“With every unprecedent rise in bills comes the need for greater reflection on the cap’s purpose and continued place in the energy market. Throughout the energy crisis, the government and Ofgem have remained committed to the cap and in its ability to shield consumers from a volatile energy market. However, the cap was never meant to be a permanent solution, was created for a different energy market than the one we face today and has not protected consumers from what will be incredible hardship this winter. We urge, as we have done previously, for the cap to be reviewed and mechanisms for protecting the most vulnerable, such as social tariffs, to be considered as viable alternatives.
“In the meantime, a key focus for the next Prime Minister and for Ofgem must be protecting consumers, and the wider economy from the impact of this rise. There are several avenues that can be explored including a review and expansion of the current support package of at least £400 per household.
“However, all of these are temporary solutions and must be accompanied by a focus on implementing a viable long-term solution.
“Today should be seen as a wake-up call to policy makers that short-term thinking and triage of the energy system is not enough. Without real change to the energy system in this country it is consumers, suppliers and the economy that will all continue to suffer the consequences.”
For more information on our price cap forecasts please find our explainer piece on the website: What is the price cap?
Figure 1: Cornwall Insight’s default tariff cap forecasts, £ per year including VAT (dual fuel, direct debit customer, national average figures)
|£/annum||Q123 Forecast||Q223 Forecast||Q323 Forecast||Q423 Forecast|
|Total inc. 5% VAT||£5,386.71||£6,616.37||£5,897.12||£5,887.31|
Notes to Editors
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About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.