New energy price cap to be about £3.5k

Average yearly energy bills could increase to £3.5k, according to the Bank of England (BoE).

At a press conference where officials reported the largest interest rate hike in 27 years while forecasting a prolonged period of recession for the UK, Governor Andrew Bailey stated: “We think, on the basis of what Ofgem told us, that the price cap setting for October will be around £3.5k.

“The new methodology that Ofgem has adopted means that the window is not closed yet, there is an element that still needs to be determined, not a very large element, but still there is.”

Ofgem plans to disclose the price cap that will take place in October on the 26th of August.

A couple of days ago, consultancy Cornwall Insight estimated that domestic energy customers could pay up to £3,359 per year in October and £3,616 in January.

Reporters stated it will stay high until 2024.

“World economy has been hit by very big shocks & for the UK that means big external shocks. Over there, there have been no  what I call air gaps between these shocks. The Covid and supply chain shock has been replaced by this huge shock and in terms of energy prices and obviously emanating from the actions that Russia is taking, Mr Bailey commented.

“The Bank of England cannot forecast & I don’t know anybody who reasonably can say they could have forecast a Ukrainian war 1 year ago.

New energy price cap to be about £3.5k

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