UK consumers face forecast-busting energy-cost hikes from October with a typical household bill expected to top £4,000 by early next year, the energy consultancy group Cornwall Insight warned.
Cornwall Insight raised its forecast for the average bill from October by £223 to £3,582 a year and by more than £650 to £4,266 from January 2023.
The increase in its forecasts since last month reflected higher wholesale prices and a change in methodology to calculate the energy price gap by regulator Ofgem, which is facing a backlash over its decision to move to quarterly price cap reviews.
The consultancy forecast energy bills from Centrica's British Gas and other energy companies could reach an eye-watering £4,427 in the second quarter of 2023 before declining in the second half of next year.
“These new forecasts for the January to March 2023 quarter further underline the need for support for households who will struggle to pay their energy bills this winter,” said Cornwall Insight.
“It is essential that the government use our predictions to spur on a review of the support package being offered to consumers. If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now.”
It suggested it was time to consider replacing the price cap altogether.
“After all, if it is not controlling consumer prices, and is damaging suppliers’ business models, we must wonder if it is fit for purpose – especially in these times of unprecedented energy market conditions.”