Energy bills for the average household in the UK are set to fall by around £293 annually by April, based on new forecasts.
Cornwall Insights predicts costs will plummet from £1,928 a year to £1,635 from the beginning of the month, for the average dual-fuel household paying by direct debit.
The energy consultancy firm estimates regulator Ofgem’s will cap the price of a unit of gas at 5.96p and electricity at 23.27p.
This is the firm’s last forecast before Ofgem announces the new energy price cap next week (February 23).
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Energy bills are expected to drop in the coming months
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If this prediction is accurate, it appears the country’s energy prices have been able to survive the disruption of the Houthi attacks on Red Sea vessels which experts claimed could trigger a crisis.
“Lower overall price cap predictions suggest the UK has, for now, weathered the storm of Red Sea tensions, securing a steady supply of LNG (liquid natural gas) through the Atlantic,” Cornwall Insight said.
Despite this drop in energy bills, the firm warned the UK remains too reliant on fossil fuels for its energy needs.
This means the country will have to continue importing expensive gas from countries who could decide to stop selling to the UK.
Currently, the energy price cap is £1,928 a year, which runs from January to the end of March, which is considerably higher than this latest forecast.
However, this prediction from Cornwall Insight is marginally higher than the £1,620 that the consultancy forecasted a month ago.
Dr Craig Lowrey, a principal consultant at Cornwall Insight, urged households not to get “complacent” when it comes to the changing cost of energy bills.
He explained: “Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis.
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Soaring energy bills have been an ongoing issue for families
GETTY“Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down.
“But we mustn’t get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.
“Even with the drop, prices will remain a struggle for many. We need to remember, bills remain hundreds of pounds above pre-pandemic levels, and if we don’t speed up the switch to sustainable energy and cut down on volatile imports, they are likely to stay that way.”
Richard Neudegg, director of regulation at Uswitch, added: “After a painful two years of sky-high energy bills, suggestions of a 15 per cent drop in rates could be some light at the end of the tunnel.
“While the price cap won’t officially be announced until next week, today’s forecast is a clear indication that energy prices are finally moving in the right direction and would be the lowest cap in two years.
“Consumers won’t feel the benefit from a fall in rates until the price cap comes into effect in April, so positive though today’s prediction is, it can’t help households save on heating their homes just yet."