Martin Lewis warns 'bad news' ahead after latest energy price cap forecast released
Mr Lewis said he had 'bad news', saying that a spike in wholesale gas rates means a leap in energy costs looks likely. It could mean that Ofgem, the energy regulator, could up the current price cap.
The energy price cap, which is the maximum amount energy suppliers can charge you for each unit of energy and standing charge if you are on a standard variable tariff, is currently set at £1,720 per year for a typical household. It started on July 1 and expires on September 30, meaning a new one will come into effect on October 1.
Mr Lewis said a drop was not out of the question, but said it would require a 'chunky fall in wholesale rates' to see a drop in October's price cap. He said: "Bad news! Ofgem's energy Price Cap that dictates the rate 2/3 homes in Eng, Scot & Wales pay, is now predicted to rise even more than before.
" I've knocked up this table showing today's new average predictions (from 3 big firms) for the Cap for someone on supposed 'typical use'; though far more relevant is the predicted % change as that's roughly what'll hit all homes.
"The Cap is already locked in to fall in July... what counts now is what happens next. We're now 1/3 of the way through the assessment period for the 1 Oct Cap, and the predictions for that have risen rapidly over the last couple of weeks. This is because wholesale rates, which are the main changeable factor in the Price Cap, have spiked, meaning the predictions have gone up.
"It would now take a chunky fall in wholesale rates for October not to be a rise. After that is more crystal ball gazing though. With the cheapest fixes currently around 15% cheaper than the current price cap, they look a very good bet for those on standard (ie Price Capped) tariffs if these predictions are right."
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