Prices could fall, but costs will still remain historically high - Neil Connery reports
Household energy bills for most consumers should fall by around 16% this summer, according to a new report.
The figures come from Cornwall Insight, the energy research group that previously correctly predicted the level of the cap.
On Thursday, Ofgem will set the price providers can charge from this July.
While costs for customers could drop, energy prices will remain at historically high levels as much of the government's support schemes have wound down.
The energy price guarantee currently limits a typical household’s energy bill to £2,500 per year.
From July, bills will revert to the energy price cap, which is predicted to be £2,053 per year for a typical household bill – bringing the average down by around 37 pounds per month.
European natural gas prices fell back into their normal trading range for the first time since the start of the energy crisis last week.
But the situation in Ukraine and its impact on energy prices still looms large.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “Under these predictions, an average consumer would see bills drop by around £450 compared to the existing levels of the energy price guarantee, with bills currently predicted to stay relatively stable over the next nine months.”
But the analyst firm said that, while bills were falling, it did not expect them to return to pre-Covid levels “before the end of the decade at the earliest.”
“Regrettably, it looks as if these prices may become the new normal,” Dr Lowrey added.
The price of wholesale energy increased as Covid restrictions were eased and then rocketed after Russia’s invasion of Ukraine last year.
Energy prices have shown signs of easing in recent weeks, but consumers continue to have their budgets stretched by rising food prices.
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