January 29, 2023

Taylor Daily Press

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UK regulator raises energy price ceiling by 80% |  News

UK regulator raises energy price ceiling by 80% | News

British energy organization Ofgem will raise the ceiling on energy prices by 80.06 per cent from October. Thus, the annual bill for an average British family would rise from £1,971 to £3,549 (€4203). British households will pay nearly three times more to heat their homes this winter than last year. This is a shocking price hike for the millions of Britons already struggling to pay for their daily grocery shopping.

The UK’s energy regulator Ofgem has raised the cap on utility bills to a record £3,549 from 1 October. About 4,090 euros transferred. In April, that max actually increased dramatically, to just under 2,000 pounds for a year of energy. Thus, the maximum rate was increased by about 80 percent.

The new limit regulates how much suppliers can charge households per unit of energy and applies to around 24 million households in England, Scotland and Wales at variable rates. Last winter’s limit was 1,277 pounds.

New increase in January

The maximum rate is expected to rise even higher in January as the UK competes with other countries for limited gas supplies and the market price of gas has risen sharply since the Russian invasion of Ukraine. According to energy consultant Auxilione, the average household’s annual energy bills could rise to £5,439 in January, after the next maximum rate adjustment.

“Families that don’t really have the financial maneuverability room can’t afford this increase,” said Peter Smith, director of the charity National Energy Action. Bill Pullen, CEO of the energy company Utilita Energy, which supplies 810,000 homes with electricity, also expects a significant increase in the number of people struggling to pay their energy bills.

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Inflation rate rose to more than 18%

The upper limit puts more pressure on British purchasing power. UK inflation has already exceeded 10 per cent and, according to economists, may rise further to more than 18 per cent in January.

The British government had already announced a £15 billion rescue package in May to help with rising energy bills. Calls for more help have yet to be answered due to the Conservative Party leadership election. A government spokesperson said that no major decisions will be made until a new prime minister is inaugurated on September 5th.

“It is clear that the new prime minister needs more work to address the impact of the upcoming price increases in October and next year,” said Jonathan Brierley, director of Ofgem, in a statement. “The response must be commensurate with the scale of the upcoming crisis.”

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