The UK faces rising energy prices this summer.
In July, the UK is expected to raise the cap on household energy prices by about 18% due to disruptions in gas supplies. Authorities are considering measures to support the population, but their options are limited.
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In July, the UK is expected to see an increase of around 18% in the energy price cap for households. This forecast was published by the analytics company Cornwall Insight and is slightly lower than their previous estimate of a 20% rise.
According to their calculations, the maximum annual cost of energy for a typical household could reach £1,929 ($2,549.17), which is £288 higher than the current level of £1,641 set in April.
The anticipated increase is attributed to shipping disruptions in the Middle East and the suspension of liquefied natural gas exports from Qatar, one of the world’s largest suppliers. These events have led to a significant rise in global gas prices.
The Treasury is considering possible measures to support the population amid rising energy costs, but options are limited due to the high level of government borrowing.
Wholesale energy prices remain the main factor in setting the price cap for households, which is determined by the UK energy regulator Ofgem. The cap is reviewed quarterly using a special formula that also takes into account suppliers’ network costs, as well as environmental and social charges.
Ofgem plans to announce the next price cap level by May 27.