Energy prices are expected to be hiked by 9% from October as the UK approaches the colder winter months, with Ofgem set to announce its latest cap on Friday.
Cornwall Insight analysts forecast Ofgem will raise the cap from £1,568 currently to £1,714 from October, reflecting the typical amount a British household would pay on an annualised basis.
This comes after volatility within the global energy market, Cornwall said earlier this week, as gas prices have climbed in recent months and been driven by Ukraine’s incursion into Russia most recently.
The October cap will determine energy unit prices for the remaining three months of the year, with costs having sat at their lowest for two years between July and September.
Cornwall added that an increase in prices ahead of the winter was always expected, but warned further volatility could emerge as fighting continues between Russia and Ukraine.
“While we don't expect a return to the extreme prices of recent years, it's unlikely that bills will return to what was once considered normal,” principal consultant Craig Lowrey said.
He added: “Without significant intervention, this may well be the new normal,” with Ofgem’s cap having sat lower before the war, at £1,277 in October 2021.
Ofgem will officially announce the cap price for October on Friday.