Bills will hit nearly £3,600 from October, experts say in final prediction

Families face a grim winter as experts predict the cap on energy bills will hit close to £3,600 per year from October – before rising again next year.

It is a forecast that will pile pressure on the Government to take rapid action, and spells out pain for more than 20 million households.

The observation window – when regulator Ofgem tracks the market to decide what the cap will be – slammed shut on Thursday, so the prediction is more certain than ever.

The regulator is set to announce the new price cap, which will come into effect from October, next Friday.

Auxilione, an energy consultancy, said its final prediction is that officials will set the cap at £3,576 per year for the average household.

The cap is currently £1,971.

The £3,576 marks a drop of £62 from Auxilione’s previous forecast and the first significant fall in the consultancy’s expectations for weeks.

The experts say a recent change from Ofgem is to thank for the lower forecast.

“Ofgem pointed out a potential change they are considering internally to remove around £100 from the cap (in an allowance).

“We’ve included it here, hence the reduction to the previous forecast.”

But despite this ray of light, most of the rest of the forecast contains pain for households.

“Today’s market hit yet again new highs so the rest of the price caps continue skywards,” the experts said.

Based on Thursday’s gas prices, they think the price cap will hit £4,704 next January and £5,856 in April.

It will then fall but remain at stomach-churning levels, hitting £5,235 in July and £5,235 next October.

The cap impacts how much a household pays per unit of gas or electricity they consume. It is not an overall cap, so families that use a lot of energy will have higher bills, and by cutting energy use people can save on their bills.

The pound figure, which Ofgem supplies, is based on what an average household uses in a year.

The forecast will provide ammunition to those demanding action from ministers to protect families from the pain of a cold winter.

Labour and the Liberal Democrats have suggested plans to freeze bills at the same level as now, while many of the biggest energy suppliers have backed a similar idea.

But the Government has made it clear it will not do anything substantial until a new prime minister is in office on September 5.

On Thursday, the trade body for energy companies called for more support on top of the £400 promised to households in May.

“Time is running very short ahead of October and we know many customers are already struggling after the last price rise – so the predicted increases will simply be unaffordable for millions of households,” said Dhara Vyas, Energy UK’s director of advocacy.

“Given the urgency, our industry believes the most practical way to help customers ahead of Christmas will be to increase the amount of support made through the existing bills support scheme.

“However, energy bills are set to remain high for the foreseeable future so it will be crucial to put something in place that will shield customers from these.

“A Government-backed loan scheme could help do just that by spreading the costs from an exceptionally volatile few months over a much longer period.”