Cornwall Insight has forecast reduced volatility in energy bills in the coming months news which industry commentators see as good news for consumers.
Price cap projections at the energy consultancy have shifted just £38 since March, with a typical household now predicted to pay approximately £2,060 per year from July.
Conrwall Insight said the stabilisation of the forecasts reflects the decreased volatility in the wholesale energy market, the relatively mild winter, higher than-predicted European storage levels and reduced demand from consumers, which has lowered concerns over supply.
Richard Neudegg, director of regulation at Uswitch.com, said it was a boost for consumers.
“Cornwall Insight’s price cap prediction will be welcome news to consumers, as it would save the average household £440 compared to the Energy Price Guarantee from July," he pointed out.
“Although this is still high by historic standards, it is a sign that the energy market is starting to stabilise, which should encourage suppliers to start bringing back competitive fixed deals.
If wholesale prices remain less volatile, it is thought an increasing number of energy suppliers could be prompted to introduce fixed-rate tariffs aligned with or close to the price cap, as they become less apprehensive about the possibility of a sudden surge in energy prices, analysts at Cornwall Insight said.
“If wholesale prices rise again later this year, a fixed deal could end up being better value especially if priced lower than the cap. However, the opposite could be true if wholesale prices fall further and the cap is lowered again during the fixed term," Uswitch's Neudegg commented.
The research showed that its predictions for the calendar third quarter have remained relatively stable since the end of February, fluctuating by around £100 over the past two months.
This compared to predictions at the start of the year which moved by over £6,002 from January to mid-February as the wholesale market shifted.
Looking further ahead, the predictions for the fourth quarter and the first quarter of 2024 show – all things remaining equal – the cap is expected to stay relatively steady.