The energy price cap in the United Kingdom (UK) will rise by 10 percent in the fourth quarter of 2024, pushing bills up to 1,717 British pounds (about 2,263 U.S. dollars) a year for a typical household, the UK’s energy regulator said on Friday.
“Rising prices on the international energy market – due to increasing geopolitical tensions and extreme weather events driving competition for gas – are the primary cause of the rise,” the Office of Gas and Electricity Markets (Ofgem) said.
The increase of the price cap, which sets a maximum rate per unit that can be charged to customers for their energy use, will add around 12 pounds a month to the average bill, said Ofgem.
“We know that this rise in the price cap is going to be extremely difficult for many households. Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to,” said Jonathan Brearley, CEO of Ofgem.
Brearley urged British households to “shop around” and look for options that could save them money.
The regulator also called for efforts to build a homegrown renewable energy system in order to lower bills and create a sustainable and secure market that works for customers.
Cornwall Insight, a UK energy consultancy firm, forecasts that the price cap will rise again for the first quarter of 2025 to about 1,762 pounds.
“A volatile wholesale market and a country heavily reliant on imported energy has created a perfect storm for fluctuating household bills,” said Craig Lowrey, principal consultant at Cornwall Insight.