ENERGY BILL CAP WON’T FIT FOR LONG

Ofgem, the energy watchdog, has admitted a cap on rip-off prices could last for just three months.

The regulator announced a limit on the unit rate and standing charge suppliers can impose on 11 million households on default deals – mainly standard variable tariffs – from January 1.

It will theoretically save the

average customer £76 a year. But Ofgem warned it was “likely” to announce an increase in February if wholesale costs keep rising, to take effect in April.

Ofgem chief executive Dermot Nolan said: “The price cap will ensure that, whether energy costs rise or fall, suppliers are not feathering their nest.”

But Martin Lewis, founder of MoneySavingExpert.com, said: “It is not a cap on the price you pay, it’s a cap on the rate charged.”

Meanwhile, the charity National Energy Action expressed concern that Ofgem was moving customers who receive the Warm Homes Discount and who do not have a prepayment meter away from its “safeguard” tariff and onto the new default price cap.