Price cap forecast to remain above £2,200 until winter 2023

The price cap on default tariffs is expected to remain above £2,200 for at least the next three periods up to and including the winter of 2023/24, according to Cornwall Insight.

The consultancy predicted that the cap would rise to £2,595 for the next period beginning in October, split between £1,086 for electricity and £1,509 for gas.

Despite representing a £624 increase over the current price cap level of £1,971 that came into effect at the beginning of April, the figure is still lower than some previous warnings that the cap could rise to well over £3,000 for the start of the next period in October.

Cornwall predicted that the cap will then fall by £303 to £2,292 from April 2023 and by £9 to £2,283 from the following October.

The consultancy released the figures ahead of the Queen’s speech on Tuesday (10 May), which included the announcement of a new Energy Security Bill that will enable the extension of the price cap beyond 2023.

The government has faced criticism for failing to offer to consumers any further assistance beyond the £9.1 billion support package announced by chancellor Rishi Sunak in February.

The package featured a £150 council tax rebate for households in bands A to D in April and a £200 rebate on energy bills in October that will be repayable in £40 instalments over the following five years.

Since then, there have been further wholesale price increase as a result of the invasion of Ukraine and Europe’s subsequent efforts to wean itself of Russian gas.

Commenting on the announcement of a new Energy Security Bill, Energy Saving Trust head of policy Stew Horne, welcomed the likely extension of the price cap but said “there is also an urgent need to provide immediate help to people struggling with the ongoing cost-of-living crisis now.”