Money Saving Expert's Martin Lewis has slammed the government for their 'zombie' approach to the cost of living crisis.
Appearing on the BBC's Today programme, Mr Lewis called the situation 'desperate' and predicted that millions of households will be forced to make 'difficult financial choices'. He added that the energy price cap is expected to rise once again to £3,500 annually, piling more pressure on struggling households.
Speaking on Radio 4's Today, he said: "I've never seen anything like this. It's going to throw many households into a terribly difficult financial situation that will leave them making some awful choices.
Read more: Energy price cap warning as fears household bill could hit £500 in January
"Let's be absolutely plain here, we know roughly what the price cap is going to be. It is set based on a published algorithm - it is based on wholesale prices. The October price cap is based on prices between February and mid-August so we're nearly at the end of that.
"And the current prediction is prices will rise 77 per cent on top of the 52 per cent rise we saw in April, taking the typical bill to £3,500 a year, that's with the prediction I go for. Others are saying it will go higher we're expecting it to rise again in January.
"Now what that means year on year from last October to this October, a typical house will be paying £2,300 a year more on their energy bills alone. Forget the rises in mobile and broadband and tax and everything else."
He added: "And the package that has been put out so far to help the poorest home who have the least financial resilience is a maximum 1,200 quid. £300 minus £1,200 is £900 extra - that is not sustainable for the poorest homes."
Speaking about Rishi Sunak or Liz Truss potentially becoming the next Prime Minister, Mr Lewis said: "You either have to cut prices for people or put more money in their pocket, especially at the poorest level."
He went on to criticise the "zombie government the country has at the moment" which can't "make any big decisions". He added: "The formal announcement of the price cap will be toward the end of August, as soon as that happens that will crystallise the companies policies and they will start communicating to customers of the direct debit rise.
"A £100 direct debit will go to roughly £177, a £200 direct debit will go to roughly £350. People will be panicking, it will be desperate - they're already panicking right now." Mr Lewis then called for Boris Johnson, Liz Truss and Rishi Sunak to get together and form a collective decision on what help they can give to reduce the damage across the country.
Mr Lewis' warning came after experts said energy bills could hit £500 for January alone. BFY Group, a utilities consultancy, said it expects the cap on bills to hit £3,850 between January and April next year – hundreds of pounds more than prior predictions.
The latest forecast comes after the Kremlin further strangled the flow of gas to Europe. While the UK gets very little of its gas directly from Russia, the price paid here is determined by what happens across the Continent.
“Following further rises in wholesale prices as flows of gas from Russia to Europe via the Nord Stream 1 pipeline drop to 20% of capacity, we now forecast the Ofgem price cap to rise to £3,420 in the fourth quarter of 2022 and £3,850 in the first quarter of 2023,” Dr Gemma Berwick, a senior consultant at BFY Group said.
“This will make the average household bill over £500 for January alone.”
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