The EPG ensures that the average annual household energy bill is limited, but the increase from £2,500 to £3,000 from next month means energy bills will increase by an average of 20 percent. The scheme was introduced last October and means no one pays the rate set by Ofgem at present.
A fall in the wholesale price of energy means that Ofgem has been able to reduce the price cap from £4,279 to £3,280. Forecasts for July and October suggest this could fall below £3,000.
Ofgem’s chief executive, Jonathan Brearley, said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the energy price guarantee. This means that on current policy, bills will rise again in April. I know that for many households this news will be deeply concerning.”
Dr Craig Lowrey, the principal consultant at Cornwall Insight, said: “Regrettably the forecast for …