Households are likely to be hit with a further hike in energy bills for the first three months of 2025, according to industry forecasters Cornwall Insight.
They estimate an annual cost of £1,736 for a typical dual-fuel consumer on a standard variable tariff, which marks a 1% rise compared to Ofgem’s October price cap.
The price cap, where the regulator sets a maximum limit on the rates that energy suppliers can charge for each unit of gas and electricity and their standing charges, was previously hiked by £149 to £1,717 in the summer.
Cornwall’s prediction “reflects the volatility of the wholesale market, driven by factors such as geopolitical and supply concerns, maintenance on Norwegian gas infrastructure, weather-related disruptions, and other smaller influences”, the research firm stated.
Gas prices recently spiked, for example, after the apparent resolution of a dispute between an Austrian company and Russia supplier Gazprom.
Craig Lowry, principal consultant at Cornwall, said the lack of a fall in energy prices will be "disappointing" for households. There “doesn't seem to be any sign of a return to pre-energy crisis levels”, he told the BBC.
Cornwall Insight’s default tariff cap predictor, which forecasts Ofgem's quarterly price cap, examines the factors influencing household energy bills.
The upcoming price cap for January includes a standing charge of £0.61 per day for electricity and £0.32 per day for gas. Unit rates are set at 24.83p per kWh for electricity and 6.33p per kWh for gas.
Ofgem's price cap peaked between October 2022 and June 2023 at an annual cost of £2,380 during the energy crisis following the invasion of Ukraine, coming down to £1,976 from July to September 2023 and again to £1,834 for the final quarter of that year.
This year the average annual bill for a typical household rebounded to an annual cost of £1,928 in the first three quarter, falling to £1,690 in the second before rising again.