On Monday, Ofgem revealed a shake-up plan to adjust the price cap level every three months to reflect market prices more accurately and protect customers.
Analysts from Cornwall Insight have predicted that the proposals could bring a 5% reduction on their current forecast about the winter price cap.
Dr Craig Lowrey, Principle Consultant at Cornwall Insight, said: “Our initial view based upon the information and draft models provided by Ofgem – and given current market condition – is that the fourth quarter 2022 and first quarter 2023 will show an approximate 5% reduction on our current forecast, which under the existing seasonal methodology is around £2,750 per annum for winter 2022-23.
“However, due to the many variables which drive our forecasts and the potential for further updates from Ofgem on their plans, this is subject to change.”
Two weeks ago, and just a few hours before the Queen’s Speech, Cornwall Insight updated its latest price cap forecasts for the coming winter.
They predicted that energy bills could spike to nearly £2,600 per year in October.
On 1st April, the price cap rose from the previous level of £1,277 to £1,971.