Energy bills expected to SOAR by £425 in January in huge blow to millions of households

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MILLIONS of Brit households are facing a fresh energy bill nightmare, with costs set to rocket by around £425 in January, according to new forecasts.

The hike would see a typical household’s annual energy bill leap by roughly 25%, according to analysis by Bloomberg Economics.

It comes as the war in Iran continues to send shockwaves through global energy markets, driving up the price of wholesale gas and electricity that suppliers pay before it reaches our homes.

Bloomberg Economics forecasts the energy price cap – the limit set by regulator Ofgem on what suppliers can charge – will surge by about £427 to roughly £2,150 a year for the average household from January.

That would push bills perilously close to the £2,500 cap the government was forced to bring in back in 2022 following Russia‘s invasion of Ukraine, when the state had to step in and subsidise the difference between rocketing market prices and what households paid.

That bailout cost taxpayers £21billion.

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British gas prices have already climbed to 203.28p per therm, the highest level seen since late 2022, as fresh turmoil in the Middle East continues to rattle markets.

A series of strikes linked to the conflict involving Iran sent oil prices surging past $100 (£73.78) a barrel for the first time since July.

Because gas and oil markets are so closely linked, the spike in oil prices has helped drag UK gas prices up to their highest point in almost three years.

UK month-ahead gas futures have rocketed by 150% since the war began, while the equivalent electricity contract has more than doubled in price.

Households are already feeling the pinch after Ofgem confirmed the price cap would rise 4% in October, taking the typical dual-fuel bill from £1,663 to £1,723 a year.

That followed a 13% hike back in July – meaning families were already facing higher costs before this latest wave of wholesale price rises has even hit their bills.

The prospect of another huge jump in January will be a major headache for Prime Minister Andy Burnham, who took steps to ease the burden on households during his first weeks in office in July.

However, those savings were wiped out by the increase in the price cap announced for October.

The government is now understood to be considering fresh measures to soften the blow for struggling families, including extending the £150 Warm Home Discount to people who currently do not qualify for it.

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Tuesday 15 September

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