Status: 08/26/2022 11:38 a.m
Consumers in Great Britain must be prepared for a huge jump in the price of gas and electricity. From October, the price cap for the annual costs will rise to around £3,550. And it could be even more.
British consumers will have to pay a further 80 percent more for electricity and gas from October. Energy regulator Ofgem has announced the latest price cap that utilities are allowed to charge their customers.
According to this, households will pay an average of 3549 pounds a year for heating and electricity in the future – the equivalent of 4205 euros. The costs are based on the consumption of an average UK household of two to three people using 2,900 kilowatt hours of electricity and 12,000 kilowatt hours of gas per year. If you consume more, the price cap does not protect you from an even higher bill.
High energy costs, high inflation
In April, annual energy costs for the average household had already risen by 54 percent, a record high. The bills had been capped at £1971. Last winter the upper limit was 1200 pounds.
Many people in the UK are already struggling with high inflation. It rose to 10.1 percent in July, the highest level in 40 years. With the increase in the price cap, the pressure on the government to announce measures to relieve households increases.
However, a concrete plan is not expected before September 6th, when the successor to outgoing Prime Minister Boris Johnson will be decided. Secretary of State Liz Truss, who is considered the favourite, only announced “immediate help”.
“Devastating news” for many people
Ofgem boss Jonathan Brearley described the increase as “devastating news” for families already living on the poverty line. Addressing the new government, which is due to start work in early September, he said: “We are working closely with you. But we must all act with urgency and decisiveness to solve this problem,” he said.
Charities and health organizations are also warning that high energy prices are a disaster for poorer people and with winter approaching. More and more people would have to decide whether to heat their homes or buy groceries.
Cap could be raised again
Interim Finance Minister Nadhim Zahawi acknowledged that the announcement caused “stress and anxiety” among people. But help is on the way, he assured. So there should be a one-time aid of 400 pounds for all households. Welfare recipients will receive an additional £650 and pensioners an additional £300. However, the measures were widely criticized as insufficient.
The cap is expected to be raised sharply again in January and April to reflect the high market prices for electricity and gas and to protect providers from collapsing. It is projected that this could increase the annual energy bill for the average household to as much as £7,000.