Price cap predicted to spike to more than £2,900 for the first time

Analysts forecast a further upward pressure in gas prices as Russia cut supplies to more countries

Big Zero Report 2022

Millions of customers could pay more than £2,900 a year by January next year on energy bills.

The latest developments regarding Russian oil sanctions and cuts of gas supplies to several European markets have forced analysts from Cornwall Insight to raise their price cap forecasts.

More specifically, the consultancy predicts the October default tariff cap will be £2,879 while this could rise to more than £2,900 in January for the first time.

Last month, Ofgem‘s Chief Executive Jonathan Brearley predicted the cap on household energy bills is to rise to about £2,800 in October.

Dr Craig Lowrey, a Principal Consultant at Cornwall Insight, said: “While Russia provides only a very small percentage of UK gas supplies, the impact on the cap reflects the UK’s wider import reliance on EU and Norwegian gas flows.

“If sanctions were to be applied by the EU to Russian gas supplies, any Russian shortfall would potentially imply that these nations may be able to export less gas to the UK than would otherwise be the case, which would in turn be reflected in both gas and electricity prices.”

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