More misery for UK homes as energy price cap soars 80% to £3,549 a year

More misery was placed on hard-pressed British households on Friday when the energy regulator raised the maximum that suppliers can charge to £3,549 a year.

Against a backdrop of runaway inflation and surging energy company profits, Ofgem gave the green light to an 80% increase on the current price cap of £1,971 for the average dual-fuel tariff.

UK inflation passed the 10% mark last month and has been forecast to hit 18% early next year. The regulator declined to give projections for the next price cap change in January because the market of market volatility. However it did warn that prices “could get significantly worse through 2023”.

The new cap will affect 24 million households – about 85% of the population. Ofgem chief executive Jonathan Brearley cited Russia’s invasion of Ukraine and cuts in supplies to Europe had for higher wholesale gas prices.

A leadership battle within the ruling Conservative Party between Liz Truss and former finance minister Rishi Sunak has distracted the government, which has refused to implement any support package until a new prime minister is appointed next month.

"The government support package is delivering help right now but it’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming in October and next year," said Brearley.

Reporting by Frank Prenesti at Sharecast.com