Liveblog: What is Ofgem’s new energy price cap?

Last update: Friday August 26, 2022, 07:36

Ofgem has confirmed an 80% increase in the energy price cap, taking the average annual household bill from £1,971 to £3,549 from October.

The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1 and will remain in place until December 31, when it will be adjusted again.

Ofgem chief executive Jonathan Brearley has warned of the hardship energy prices will cause this winter and urged the new Prime Minister and Cabinet ‘to provide a further and urgent response to the continuing surge energy prices”.

The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to rise as the world unblocked from the Covid pandemic, and had been pushed even higher to record highs by the Russia which slowly cut off gas supplies to Europe.

The Ofgem energy price cap is expected to rise by around 80% on Friday (Image: PA)

Ofgem’s chief executive has urged the new Prime Minister to do more to deal with the impact of rising energy prices as the cap on energy bills has soared by 80% to £3,549 a year.

Jonathan Brearley said the government should add to the support it announced in May when bills were only expected to climb to £2,800.

“The government’s support package is helping at the moment, but it is clear that the new Prime Minister will have to do more to deal with the impact of the price rises to come in October and next year,” said Mr Brearley.

“We are working with ministers, consumer groups and industry on a set of options for the new Prime Minister which will require urgent action.

“The response will have to match the scale of the crisis we have before us. With the right support in place and with the regulator, government, industry and consumers working together, we can find a way through this.

Think tanks have claimed that failing to act now could cost the UK government more in the long run.

Welcome to NationalWorld’s live blog of Ofgem setting the new energy price cap for October.

This is the limit to which energy suppliers can raise their bills, and experts predict it could push gas and electric bills up by around 80% to the equivalent of over £3,500 per year.

This is happening because wholesale gas prices have been pushed up by the war in Ukraine.