Household energy bills are projected to decrease by approximately 7 per cent this July, offering some relief to consumers facing the burden of rising living costs.
Industry analysts Cornwall Insight predict the typical annual household energy bill will fall by £129, settling at around £1,720 when Ofgem's revised price cap takes effect.
Ofgem, the energy market regulator responsible for setting the upper limit on what energy suppliers can charge customers, is expected to formally announce the updated price cap on Friday.
This anticipated reduction follows three consecutive price cap increases, with the current cap standing at approximately £1,849 for a typical household.
The projected decrease is attributed to fluctuations in global gas and oil prices, influenced in part by US President Donald Trump's aggressive tariff policies.
While earlier forecasts suggested a potential 9 per cent drop in bills, easing trade tensions in recent weeks have tempered these predictions slightly. The final figure will be confirmed by Ofgem's official announcement.
Cornwall Insight said it expects the reduced price cap to be followed by a “modest drop” in October and another similar dip in January next year.
Craig Lowrey, principal consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.
“It’s a step in the right direction, but it should be taken in context.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.
“As such, there remains a risk that energy will remain unaffordable for many.”
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.
The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
It does not limit total bills, because householders still pay for the amount of energy they consume.
