U.K. Energy Price Cap Set to Rise 30% Next April, Cornwall Says
(Bloomberg) -- The U.K.’s energy market price cap is expected to rise to about 1,660 pounds ($2,254) per year in April, according to energy market analysts Cornwall Insight Ltd.
That’s a 30% increase from the current default-tariff cap of 1,277 pounds that regulator Ofgem says energy suppliers can charge households. The new estimate is significantly higher than Cornwall Insight’s previous forecast in July of 1,251 pounds.
“These figures reflect material increases in the period since our most recent default tariff-cap forecast,” Craig Lowrey, senior consultant at Cornwall Insight, said in a statement. With record wholesale prices, the U.K. “energy market remains on edge for fresh volatility and further consolidation,” he said.
The constraints imposed by the price cap are partly why 10 British energy suppliers have failed since August after they were hit by record-high power and gas prices that they couldn’t pass on to consumers.
The price cap, which is updated twice yearly, will be announced in February and will kick in on April 1.
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