British household energy bills to jump 80% to over $4,000 a year

Date:

  • Price ceiling for 24 million households rises from October
  • Even higher prices expected in January
  • Regulator calls for urgent government intervention
  • ‘This is a national emergency,’ says Labor opposition

LONDON, Aug. 26 (Reuters) – Britain’s energy bill is set to rise 80% from October to an average of £3,549 ($4,188) a year, the regulator said Friday, putting millions of households into fuel poverty and putting businesses at risk unless government measures takes in.

Jonathan Brearley, CEO of Ofgem, said the surge would have a huge impact on households across Britain, and another surge would likely come in January as Russia’s decision to curtail European inventories pushes wholesale gas prices to record highs. .

“This is a catastrophe,” said Martin Lewis, Britain’s leading consumer rights advocate, warning that people would die if they refused to cook food or heat their homes this winter.

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Brearley said the government’s response was needed to match the scale of the crisis with “urgent and decisive” action.

Prime Minister Boris Johnson, who has been in office for less than two weeks, said his successor would announce “extra money” next month aimed at the most vulnerable.

“But what I don’t think we should be doing is trying to limit the whole thing for everyone, the richest households in the country,” he told reporters.

In May, when price projections were significantly lower, the government announced a £400 ($472) discount on consumer bills for this winter.

The opposition Labor party said that if it were in power it would freeze prices, which could cost around £60 billion a year – almost as much as the COVID pandemic leave scheme.

Pressure is being felt across Europe, but in Britain, which is particularly reliant on gas, the price increases have been dazzling. read more

An annual average bill of £1,277 last year will reach £3,549 this year and leading forecaster Cornwall Insight said prices are likely to rise again in 2023.

It expects bills to peak at £6,616 in the second quarter and households will be able to pay around £500 a month for energy by 2023, for many more than rent or mortgage.

The surge has pushed inflation to its 40-year high and the Bank of England has warned of a prolonged recession. Despite the bleak outlook, Britain’s response has been hampered by the race to replace Johnson, which runs until September 5 and targets the votes of Conservative party members who are enthusiastic about taxes and austerity.

A gas stove is seen in Boroughbridge, Northern England Nov. 13, 2012. REUTERS/Nigel Roddis

The two candidates – Foreign Secretary Liz Truss and former Finance Minister Rishi Sunak – have argued over how to respond, with frontrunner Truss initially saying she would rather cut taxes than give “handouts”.

Both sides have acknowledged that the poorest in society need support and the government went on to say on Friday that households should look at how much energy they consume – after previously saying people would know what to do.

‘NATIONAL EMERGENCIES’

The PvdA said the country could no longer wait for action. “This is a national emergency,” said financial spokesman Rachel Reeves.

Truss and Sunak have proposed suspending environmental taxes or cutting a sales tax — both ideas rejected by analysts as far too little to smooth out the major blow to family budgets.

Wholesale price increases are passed on to UK consumers through a price cap calculated every three months, which is intended to prevent energy suppliers from turning a profit, but which is now the lowest price available to 24 million households.

The volatility in the sector is so great that nearly 30 energy retailers have gone out of business and Ofgem said most domestic suppliers are not making a profit.

Supplier E.on said Britain needs to accelerate its shift from gas to gas and better insulate its drafty Victorian-era housing stock, as rival Scottish Power urges the government to set up a deficit fund to keep bills low and spread the costs over a 10-15 year period.

Ofgem said customers who couldn’t pay their bills would get affordable reimbursement plans from their supplier.

They would only be forced to switch to prepayment meters, which charge above-average rates as a “last resort”.

The market is too unstable to predict the next cap for January, Ofgem said, but winter gas market conditions meant that prices could get “significantly worse” through 2023.

($1 = 0.8463 pounds)

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Reporting by Paul Sandle and Kylie MacLellan; adaptation by Kate Holton, Jason Neely and Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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