Keep knowledgeable with free updates
Merely signal as much as the UK power myFT Digest — delivered on to your inbox.
Britain’s family power payments are set to fall in the summertime after regulator Ofgem lowered the worth cap by 7 per cent, in a lift to Sir Keir Starmer’s authorities because it tries to deal with the excessive price of residing.
Ofgem on Friday set the worth cap for July to September at a degree that will see typical households pay £1,720 a 12 months, down from £1,849 at current, following a fall in wholesale gasoline prices.
It’s the first lower within the value cap since July final 12 months and can present some aid for households struggling to pay power payments.
However typical payments are nonetheless a number of a whole bunch of kilos larger than earlier than the power disaster that began in late 2021.
Craig Lowrey, principal marketing consultant at market analysts Cornwall Perception, mentioned the discount within the cap was a “welcome improvement” however there was a danger that “power will stay unaffordable for a lot of”.
He urged the federal government to “proceed to discover focused help, together with social tariffs, to make sure these most in want will not be left behind because the market evolves”.
It comes as the federal government this week mentioned it might backtrack on cuts to winter gasoline funds for pensioners, following a public backlash.
Utility payments helped push inflation to a 15-month excessive of 3.5 per cent in April, in keeping with official figures launched this week, dampening expectations of rates of interest cuts from the Financial institution of England.
Cornwall Perception mentioned wholesale gasoline prices had fallen in current months, partly attributable to delicate temperatures and the prospect of a slowing demand within the US.
Fuel costs have a knock-on impact on the worth of electrical energy in Britain because of the vital position of gas-fired energy stations.
The value cap, launched by the Conservative authorities in 2019, units a restrict on how a lot power corporations can cost home prospects on default tariffs, per unit of power consumed. It’s reset each three months to replicate adjustments in wholesale costs.
