Energy bills set to rise again in October, regulator warns

By Kevin Peachey
Personal finance correspondent, BBC News

Image source, Getty Images

Householders should expect a further rise in energy bills in England, Wales and Scotland in October, the boss of energy regulator Ofgem has said.

Jonathan Brearley said prices in the wholesale energy market remained "highly volatile".

Not being able to afford energy bills was a matter of life and death for some people, he said.

Analysts Cornwall Insight predicted that a typical domestic energy bill will go up by £600 a year in October.

That would take the typical household's gas and and electricity bill to £2,595.

'Huge strain'

In a speech in Glasgow, Mr Brearley said that gas markets were in a febrile state following Russia's invasion of Ukraine.

"The market remains highly volatile and as a result we do expect further price increases later this year," he said.

He said that the effect of higher prices was "putting huge strain on the customers we serve".

"I talk to customers on a regular basis, and I know how tough rising energy prices are for many households and businesses," he said.

"For some, not being able to afford rising energy bills is literally a matter of life and death."

He pointed to a case in which a woman who was being treated for a brain tumour had worries about keeping up with energy bills.

"What was shocking was to learn that she feels more comfortable in hospital where she can eat and be warm than at home," he said.

A widely-predicted increase in October comes on top of a £700 typical rise in annual domestic gas and electricity bills, which took effect in April when the price cap was last raised. Consumers in Northern Ireland - not covered by the price cap - have already seen significant increases in bills.

Businesses have also faced higher energy costs, which may lead to them charging higher prices.

Mr Brearley reiterated a commitment to updating the price cap, putting suppliers under greater scrutiny and helping move the UK away from a reliance on gas.

Earlier on Monday, the National Institute of Economic and Social Research suggested an estimated 1.5 million households across the UK will struggle to pay food and energy bills over the next year.

A Treasury spokesperson said the country has had a "strong economic recovery" from the pandemic but acknowledged that these were "anxious times", and said the government was taking action to support households.

That includes £200 being taken off energy bills from October, but households will pay that back in instalments from 2023.

Previous versions of this story quoted a speech by Mr Brearley in March. This has now been updated.