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Soaring Energy Bills Could Increase Cost Of Living Until 2024

It comes as typical domestic energy bills are expected to exceed £3,600 per year this winter, according to a new forecast.

According to consultancy Cornwall Insight, the energy price cap in England, Wales, and Scotland could rise to £3,615 in the new year, hundreds of pounds higher than its previous estimate of £3,363. 

Dr Craig Lowrey, principal consultant at Cornwall Insight expressed his concern about the rise in forecasts for October and January. "It is not only the level but the duration of the rises that make these new forecasts so devastating," he stated.

“Given the current level of the wholesale price, this level of household energy bills currently shows little sign of abating into 2024,” he said.

The October forecast represents a 70 percent increase over the current level of £1,971 per year. It also represents a 163 percent increase in energy bills over last winter.

Many households are already struggling with the cost of living crisis due to inflation. This is the highest inflation in the last 40 years. Fuel prices will continue to impact inflation in the UK, which is over 9 percent so far.

The higher energy price cap is expected to affect a lot of people. When a family has to spend a lot of their income on bills, they will risk a terrible financial situation. Personal finance expert Martin Lewis said people would “be desperate” about the winter bills.

The energy price cap is adjusted every six months based on the prices that energy suppliers pay producers for electricity and natural gas.

This has risen sharply as demand for gas increased after Covid restrictions were lifted and because the uncertainty of the war in Ukraine has threatened Russian supplies.

All households in England, Wales, and Scotland will get a £400 discount on their fuel bills in October as part of a package of government measures to help with energy bills. This will be taken care of in monthly payments over six months, with a £66 reduction in October and November and a £67 reduction each month from December to March 2023.

On the other hand, some people have asked for more help for families.

In October 2021, the average energy bill was £1,400 per year. In April 2022, when the energy price cap was raised for the last time, that went up to about £2,000.

“While no government can control global gas prices, we are providing £37bn of help for households including the £400 discount on energy bills, and £1,200 of direct support for the most vulnerable households to help with the cost of living,” said a spokesperson for the Department for Business, Energy and Industrial Strategy.

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