Households across the UK have been warned today that they might face annual energy bills worth more than £4,200 in the first quarter of 2023.
New analysis by consultancy Cornwall Insight shows that a typical household is now predicted to pay the equivalent of £4,266 a year for the three months to March 2023.
Last week, Ofgem revealed a new methodology that will enable quarterly price cap reviews.
Consultants said the £650 increase in their forecasts since last month reflects the increase in prices in the wholesale market and the change in calculation methodology of the price cap.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight said: “Many may consider the changes made by Ofgem to the hedging formula, which have contributed to the predicted increase in bills, to be unwise at a time when so many people are already struggling.
“However, with many energy suppliers under financial pressure, and some currently making a loss, maintaining the current timeframe for suppliers to recover their hedging costs could risk a repeat of the sizable exodus seen in 2021.”
In response to Cornwall Insight’s latest forecast, Morgan Wild, Head of Policy for Citizens Advice, said: “The cost of living crisis is already having a devastating impact on people’s lives. Every day we hear from people who can’t afford to turn the lights on or cook their kids a hot meal.
“The government did the right thing by bringing in targeted support, but it won’t be enough for people to manage these previously unthinkable price hikes. The obvious place to start is to increase benefits to keep pace with the cost of living. There’s no time to waste.”