The energy price cap is predicted to tumble sharply when the new level is announced next Thursday, but is seen remaining above pre-pandemic levels until the end of the decade.
When regulator Ofgem publishes the energy bills cap covering the period from July to September, it is forecast to drop to a level of £2,053-per-year, according to Cornwall Insight, the specialist forecasting firm.
Such a fall in the price cap would represent a £1,227 decrease from April and an average consumer would see bills drop by around £450 compared to the existing levels of the Energy Price Guarantee.
Bills are currently predicted to stay relatively stable over the next nine months, said Dr Craig Lowrey, principal consultant at Cornwall Insight.
Households so far have been shielded by the government limiting price rises to £2,500 as part of its Energy Price Guarantee, which was implemented following Russia’s invasion of Ukraine.
However, starting in July, household bills will revert to the price cap.
Although the figure is falling, it remains £1,000 more expensive per year than levels seen prior to the pandemic, Cornwall Insight noted, adding the figure is not expected to fall to 2019 levels until the end of the decade.
The cap is expected to fall to £1,975.70 between October and December before climbing again to £2,044 between January and March.
Volatility in wholesale energy markets is expected to persist, and the UK’s reliance on imports means geopolitical incidents could have a significant impact on energy prices.
“While bills are falling, the cap is still expected to remain comparatively high against historic norms, and those hoping to see a return to the kinds of bills seen at the start of the decade will be disappointed,” Lowrey added.
Some energy suppliers have said they plan to restart offers of fixed-price energy deals.
A recent survey found half of consumers plan to go for a fixed tariff to gain more certainty on monthly bills.
Richard Neudegg, director of regulation at Uswitch.com, said the Cornwall prediction "should give suppliers the confidence to start bringing back fixed energy deals for customers", though he noted consumers will need to decide if they want to lock in potentially rates for a longer period over facing volatility of the standard variable tariff, which could fall further.