Energy bills will fall in Great Britain from July 1, the sector regulator, Ofgem, having lowered the ceiling which corresponds to the price paid by a majority of Britons, in the wake of the fall in prices on the steps.
For the quarter from July 1 to September 30, “the energy price cap will be set at an annualized level of 2,074 pounds [2,390 current euros] for a household using two fuels (electricity and gas) and paying by direct debit, to reflect recent falls in wholesale energy prices,” according to an Ofgem statement dated Thursday, May 25.
The previous annual ceiling, dating from April, was set at 3,280 pounds (3,780 euros). At the height of winter, the ceiling had reached 4,279 pounds (4,930 euros). The government had put in place a limit of 2,500 pounds (2,880 euros) on bills for most households, with the state subsidizing the differential, to help Britons cope with the cost of living crisis.
“For the first time since the global gas crisis began more than eighteen months ago, prices are falling for customers”, welcomes Ofgem – which reviews its ceilings every three months -, while acknowledging that they remain at historically high levels and that “many households may still have difficulty paying them”.
Highest inflation in the G7
Although this downturn will ease the cost of living crisis somewhat, bills remain much higher than before the start of the war in Ukraine and the post-Covid recovery. Inflation in the UK is the highest of the G7 countries.
Soaring energy bills have been a major contributor to inflation and a crisis in purchasing power in the UK, and have also affected businesses. Inflation fell to 8.7%, falling below the 10% threshold for the first time since August, but slowed less than expected by economists and the Bank of England, especially as oil prices Food continues to accelerate – 19% in April 2023 over a one-year period, a forty-five-year high.
This should encourage the monetary authorities to further raise their interest rates, which have already been increased twelve times in a row, and currently at 4.5%.
“Encouraging to see the market stabilizing and prices moving in the right direction”, Ofgem chief executive Jonathan Brearley remained cautious in the statement, saying “in the medium term it is unlikely” to “see prices return to pre-energy crisis levels”.
