Analysts at Cornwall Insight predict that energy bills in the UK will decrease by 14% to £1,660 in April, providing some relief to hard-pressed households. This forecast comes after Cornwall Insight accurately predicted the energy price cap throughout the crisis. However, the current cap is still significantly higher than the average bill of £1,073 three years ago.
Background: Rising Energy Prices and the Price Cap
Energy bills and pump prices soared following Russia's invasion of Ukraine, which raised concerns about gas and oil supplies. In response, the UK government implemented a price cap to protect households, capping bills at £2,500 when they could have reached £4,000. Fortunately, oil and gas prices have since fallen as Europe and Britain have proven to be more resilient than expected.
Recent Developments and Potential Price Impact
While prices have recently risen due to attacks by Houthi rebels on ships in the Red Sea, causing BP to redirect its oil tankers, the impact on prices remains uncertain. Any further delays to oil deliveries could impact prices. Analyst Craig Lowrey warns that unexpected global events can lead to spikes in energy prices, which could result in higher household bills.
Overall, the projected decrease in energy bills next year offers a small glimmer of hope for UK households, who have been facing increasing financial pressures.
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