Households might be squeezed even further in October as energy bills are forecast to rise to £2,800 a year.
That’s one of the findings of the latest report by the Bank of England which predicts that if sustained, high electricity and gas prices would mean that the price cap could be around 40% higher than the current level.
The price cap rose by a massive 54% on 1st April, increasing a typical bill to £1,971 a year.
The bank’s Monetary Policy Committee (MPC) believes the predicted increase could add 1.5% to Consumer Prices Index (CPI) inflation from October.
Inflation, which is the rate at which prices rise, is already at a 30-year high and set to hit 10% by the autumn.
The committee notes the UK GDP growth is expected to slow sharply – that mainly reflects the significant adverse impact of the sharp rises in global energy and tradable goods, the report concludes.