Families were today warned their energy bills could increase yet again in October after a predicted 50 per cent surge in April – as the cost of living crisis continues to hit millions of British households.
According to Emma Pinchbeck, chief executive of Energy UK, the trade body for suppliers, households could see at least another 20 per cent climb in energy bills.
Speaking at a webinar on Thursday, she said ‘if nothing changes’, regulator Ofgem’s price cap could increase from ‘around £2,000’ in April to £2,400 in October.
It comes after consultants Cornwall Insight predicted the price cap to rocket from £1,277 to £1,865 in April, when it is next due to change.
Ms Pinchbeck said the increase could happen despite the wholesale price of gas being expected to drop.
‘They (gas prices) are still three times higher than we expect to see at this time of the year,’ she said, describing the situation as ‘enduring’.
She added: ‘We haven’t seen anything like this, not in my career or in any of the people who sit on my board.’
It comes after it was revealed Tuesday that the taxpayer could hand energy firms huge subsidies to stop them hiking bills for customers when gas costs soar, under plans being looked at by ministers.
According to Emma Pinchbeck, chief executive of Energy UK, the trade body for suppliers, households could see at least another 20 per cent climb in energy bills (file image)
The mooted ‘temporary price stabilisation mechanism’ would kick in when wholesale costs go over a set threshold.
Firms would agree not to increase bills for consumers in return for the money – but they could also repay it when prices go below the agreed level.
According to the Financial Times, Rishi Sunak recognises that the proposals could leave the government heavily exposed to prolonged high gas costs.
But the Chancellor and Boris Johnson are increasingly desperate to find a way of easing the pressure on households, with bills on track to rise by another 50 per cent in April and wider inflation spiking.
Downing Street refused to comment on the idea, saying: ‘There’s obviously ongoing policy discussions taking place across government on what’s the right course of action, but beyond that I’m not going to get into speculation.’
The PM’s official spokesman said: ‘Real wages are 2.9 per cent above pre-pandemic levels. But we know people are facing pressure with the cost of living.
‘That’s why we’re taking action worth billions of pounds to help – be it the Universal Credit taper, increasing the minimum wage, supporting households with their bills and freezing alcohol and fuel duty.’
The spokesman added: ‘Globally we are seeing challenges caused by inflation and cost of living, particularly as the global economy emerges from the worst of the pandemic.’
MailOnline understands that other options are currently regarded more favourably by ministers.
The cost of living crunch tightened its grip on Britain Tuesday with pay falling behind price rises for the first time in more than a year.
Rishi Sunak (pictured today) and Boris Johnson are increasingly desperate to find a way of easing the pressure on households, with bills on track to rise by another 50 per cent in April and wider inflation spiking
A Resolution Foundation report yesterday warned that more than six million could be plunged into financial stress by soaring energy bills
Wholesale gas prices have been rising sharply for several months in the wake of the pandemic, and as tensions run high with Russia
As households brace for eye-watering energy bill hikes this Spring, it emerged that wage growth was outstripped by inflation in November for the first time since July 2020.
Single-month growth in real average weekly earnings was minus 0.9 per cent for total pay and minus 1 per cent for regular pay – meaning people’s spending power was falling.
Downing Street blamed changes in the global economy, as Boris Johnson and Rishi Sunak desperately seek a way of easing the pressure on families.
However, there was brighter news on the labour market with job vacancies hitting another record of 1.25million as the economy recovers from Covid.
The number of posts available in the quarter to December was 462,000 above the pre-pandemic level, while unemployment in the three months to November was 4.1 per cent – just 0.1 per cent higher than before coronavirus struck.
Staff on payrolls were up by 184,000 between November and December to 29.5million. Redundancies were also at their lowest since 2006, according to the figures from the Office for National Statistics.