Energy bills to fall for UK households this summer, analysts announce

7 February 2023, 13:25 | Updated: 7 February 2023, 16:15

Britons will begin to see their energy bills fall this summer, two leading economic analysts have announced.

Independent British think tank, the Resolution Foundation said the average bill will fall to £2,200 by October, assisting to reduce inflation and bring down the cost of living.

Energy consultancy Cornwall Insight forecast the average bills could fall to around £2,360 over the summer, while predictions warned that prices could rise to £3,500 a year on average.

The foundation predicted the typical energy bill could be between £2,400 from April 2023 until April 2024, which sees a reduction in costs forecast from £3,000 at the time of the chancellor’s autumn budget.

Gas prices are expected to fall by 26 per cent between the spring and summer, according to Cornwall, while electricity prices to fall by 32 per cent. They also predicted that the average electricity bill would be £1,184 and average gas bills would be £1,205 by the last quarter of 2023.

Read more: What is the UK inflation rate and when could it start to come down?

Read more: Grocery price inflation hits record high as annual bills jump by £788

Emily Fry, an economist at the Resolution Foundation, said: “Falling wholesale gas prices have been the big economic good news story of the year so far. This will bring real benefits to families, even if it might not feel like it for some time to come.

“The cost of living crisis is far from over, but falling gas prices mean that it’s looking less bleak than just a few months ago.”

Sources from treasury said that estimates from the Office of Budget Responsibility claimed lost revenue from the windfall tax could measure as high as £12 billion, which they said would limit control for manoeuvre.

They also alerted savings would be a "one off". They said: "We cannot allow fiscal policy to be determined by the weather and a gas market that we can’t control."

Analysts said warm winter temperatures around Europe had lowered the consumption of gas as a smaller demand from China saw the diversion of liquid gas to Europe.

Falling gas prices are likely to show a boost in economic growth, along with the reduction of inflation pressure.

LBC reported last year how a 24-year-old woman named Rebecca from Dulwich has anxiety about being able to pay her gas and energy bills, despite earning £34,000 a year.

She said: "I am on £34,000 a year and I am already struggling to make ends meet.

"I am now hearing that the energy support will be wound down in the Spring, how will I get help?"

During a discussion on her show, presenter Sangita Myska raised that while £34,000 might sound like quite a comfortable salary to most, it will be "eaten up very fast" after getting taxed and while living alone in London.