According to regulator Ofgem, the majority of UK consumers’ energy bills will have a price ceiling this winter, which will only exacerbate the already dire cost-of-living situation.
Due to rising wholesale energy prices brought on the major producer Russia’s conflict in Ukraine, bills will start to rise in January, according to a statement from Ofgem.
It also stated that the average home using gas and electricity will be able to pay suppliers £1,928 ($2,418) per year instead of £1,834.
“More people are going through a tough time, so any increase in bills will be concerning,” stated Jonathan Brearley, CEO of Ofgem.
Inflation measured by the Consumer Prices Index dropped precipitously to 4.6 percent last month as energy costs decreased, meeting Conservative Prime Minister Rishi Sunak’s goal of halving the crucial number.
Though food prices are still rising by double digits, individuals and companies still have to pay high energy costs despite the government eliminating the expensive subsidies from the previous year.
In addition to Jeremy Hunt’s budget update on Wednesday, the Office for Budget Responsibility warned that 2024–2025 will see a record decline in living standards for British citizens.
According to the fiscal watchdog, actual household discretionary income per person will decline by the most since data collection in the 1950s. It is anticipated to take until 2027–2028 to return to pre–pandemic levels.
On Thursday, Chancellor of the Exchequer Hunt acknowledged that a lot of families were still having hardships.
Hunt stated on BBC radio that “people are feeling under pressure because of all the increases in inflation, shopping baskets, and filling up the tank.”
“We must keep moving forward to reduce inflation.”
In addition to providing a significant boost to workers, Hunt unveiled proposals on Wednesday to boost growth and win over voters for the upcoming general election. However, he also predicted significantly slower growth and persistently high inflation.
The most notable tax decrease was a revision to national insurance, which would result in a payroll tax that employers and employees pay that will be significantly reduced starting in January.
However, the OBR cut its predictions for economic growth to 0.7 and 1.4 percent in 2024 and 2025, respectively. This contrasted with earlier estimates of 1.8% and 2.5%, respectively.
To add to the doom, the OBR forecast that inflation would not reach the official two percent objective set by the Bank of England until the second quarter of 2025.
