Wholesale Energy Prices Drop, Energy Bills Rise
The average household bill has already risen eight per cent compared with the same time last year, while the cost of energy on the wholesale market has dropped. Families should brace for a further £100 rise in their energy bills within the next year, official figures suggest.
The Office for Budget Responsibility predicts a seven per cent rise in energy costs for families in winter this year and a three per cent rise the year after.
Average bills are currently £1,420 per family for gas and electricity, signalling an increase of £99 is on the way this year followed by a £46 rise in 2014.
The estimates were released along with George Osborne’s Budget as part of calculations about inflation.
The independent economic watchdog said higher energy costs would contribute to the rising cost of living, mostly driven by rising wholesale electricity and gas prices.
It said green taxes and other environmental policies would probably add two per cent to electricity bills and 0.5 per cent to gas bills annually until the year 2020.
The OBR predicted the costs of upgrading Britain’s electricity networks will also add around two per cent over several years. This is because companies need to connect new power stations and wind farms to the national grid as traditional fossil fuel plants are closed down.
The average household bill has already risen eight per cent compared with the same time last year, while the cost of energy on the wholesale market has dropped.
At the same time, energy companies are expected to make record profits from British homes over the coming year.