Ofgem lowers UK energy price cap as wholesale prices fall

Britain's energy regulator has cut its price cap after a fall in wholesale prices, although it admitted that hard-pressed families were likely to see little benefit.

Ofgem said the current cap would fall from July 1 to £2,074 from £3,280 per year for the average household in England, Wales and Scotland.

The lower cap will replace the government’s Energy Price Guarantee (EPG), which currently limits the typical household energy bill to around £2,500, meaning the typical annual bill will fall by around £426.

However, Ofgem boss Jonathan Brearley conceded many families will continue to struggle as bills remain high.

"Now the market is stabilising and we are seeing signs that, for example, switching may return so we may see better offers even than the price cap,"

“But ultimately, prices are higher than they were before and you’re right, many families will struggle."

The price cap rocketed last August to its current level of £3,280, after briefly reaching £4,279, from a relative low of from £1,162 a year .

Reporting by Frank Prenesti for Sharecast.com