- Royal Mail faces national security investigation over raid by Czech billionaire
- FTSE 100 closes 0.1pc higher at 7,479
- Ben Marlow: Renewable energy is the only way out of this mess
- Sign up here for our daily business briefing newsletter
The energy price cap will jump to £3,549 in October, piling more pressure on strained household budgets ahead of a tough winter for British families.
Regulator Ofgem confirmed the 80pc increase in prices, which equates to bills of almost £300 a month on average for a typical household.
The figures are likely to add to calls for the Government to do more to support people struggling to pay their bills.
Analysts have warned that millions of households will be forced into energy poverty – spending more than 10pc of their income on fuel – as a result of the surge in prices.
It looks like the situation will worsen, too, with forecasts from consultancy Auxilione suggesting the price cap could surge as high as £6,500 in April.
Tackling the crisis will be a major challenge for the new prime minister, with little chance of new policy before either Liz Truss or Rishi Sunak takes office.
Soaring energy bills are a major driving force behind inflation, which has jumped to a 40-year high, pushing up the cost of living.
The Bank of England has forecast that higher gas prices will push inflation above 13pc by the end of the year, while Citigroup this week warned it could hit 18.6pc in January, the highest in almost half a century.
Ofgem: We have no choice but to raise prices
Jonathan Brearley, chief executive of Ofgem, said:
We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year. We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action.
The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.
Energy price cap hits £3,549
Good morning.
The energy price has jumped to £3,549 as surging wholesale gas prices put an ever-bigger strain on British households.
The 80pc increase in prices will come into effect from October, Ofgem confirmed this morning.
The figures are the latest blow for families battling the cost-of-living crisis, with energy bills a major driving force behind wider inflation.
They will also pile pressure on Tory leadership contenders Liz Truss and Rishi Sunak to provide more support if they become prime minister.
5 things to start your day
1) Next PM to unveil help for households within days as energy price cap surges to £3,500 Government expected to offer support as cap jumps 80pc
2) British tech star to be snapped up by Canadian rival in $6bn deal OpenText offers significant premium for Micro Focus amid string of foreign takeovers
3) M&S accused of introducing unisex changing rooms ‘by stealth’ Critics reignite row over retailer’s decision to introduce unisex changing rooms
4) Indian voices edited out of customer service calls by Silicon Valley start-up Firm accused of ‘bias and racism’ for using artificial intelligence to make accents ‘sound whiter’
5) Biden accused of unfairly cancelling satellite contract with Musk Entrepreneur’s firm Starlink had $885m deal agreed under the Trump administration
What happened overnight
Tokyo stocks opened higher this morning, with the benchmark Nikkei 225 index rising 0.8pc in early trade and the broader Topix index climbing 0.5pc.
Hong Kong stocks opened with gains, building on the previous day’s surge. The Hang Seng Index rose 0.9pc.
The Shanghai Composite Index edged up 0.1pc and the Shenzhen Composite Index on China’s second exchange added 0.2pc.
Coming up today
- Corporate: No scheduled results
- Economics: Jackson Hole Symposium (US), Michigan Consumer Sentiment Index (US), consumer confidence (Ger)
Source: telegraph.co.uk
