Households face another year of £2,000 energy bills

HOUSEHOLD energy bills are unlikely to fall below £2,000 for at least almost a year, new analysis shows.

Cornwall Insight has forecast that the price cap on bills will remain above £2,000 until at least the first quarter of 2024. The leading analyst said yesterday that it now expects the price cap will fall to £2,062 from July, followed by £2,098 in October and £2,162 at the start of next year.

All three forecasts are below the current level of £3,280 but far higher than where the price cap stood before gas values started surging. The cap was set at £1,138 in mid-april 2021.

The price cap sets the maximum level energy suppliers can charge customers on default tariffs, which most households currently use.

The Government has stepped in to subsidise supplies so that typical household energy bills have been limited to between £2,500 and £3,000 since October 2022, at hefty cost to taxpayers.

Cornwall Insight said it was likely energy suppliers will start introducing new fixed-rate tariffs close to the price cap level now that gas markets are calmer. However, it cautioned that bills remain unaffordable for many and vulnerable to geopolitical events. Craig Lowrey, principal consultant at Cornwall Insight, said: “What we do know is that while energy bills may begin to stabilise, they are still far from returning to pre-2020 levels.

“While consumers may feel more secure, we must not underestimate the fact that these bills remain unaffordable for many households.”

It came as Goldman Sachs warned of a potential surge in gas prices later this year, as demand picks up for winter. Prices could climb above €100 (£87) per megawatt-hour in Europe, analysts said.

UK prices tend to track those in Europe, with €100 per MWH equivalent to about 260p per therm.

Prices are currently trading below 100p per therm in the UK, which is still almost double long-term averages but well below highs of almost 500p per therm in August 2022.

Goldman Sachs warned: “The combination of winter weather risk and potentially declining conservation efforts by households can quickly tighten balances.”

Separately, Saudi’s oil giant Aramco reported a 19pc fall in quarterly profits owing to lower oil prices.

The world’s largest oil producer made profits of $31.9bn (£25bn) for the three months to the end of March, compared with $39.5bn during the same period last year.