Household Energy Bills Set for Three-Year High as Ofgem Announces Price Cap Increase

Household energy bills are set to hit a three-year high due to Ofgem's price cap increase by 4% from October, affecting millions of households in England, Wales, and Scotland.

The new price cap will be £1,723 for the average household using both electricity and gas, with the typical amount of energy use estimated at 9,500 kWh of gas and 2,500 kWh of electricity a year. This means households will pay an additional £60 per year or £5 per month.

The government has introduced a VAT cut on electricity bills for six months from October, which is expected to save households £45. However, analysts at Cornwall Insight have forecast that domestic energy prices may rise a further 9% in the new year.

Energy Secretary Miatta Fahnbulleh said the removal of VAT on energy bills was a 'down payment' on helping households with energy costs. She emphasized the government's commitment to supporting households during this challenging time.