Domestic energy prices predicted to fall by 16%

Domestic energy prices are set to fall by 16% in April, providing financial relief to households.

Consultancy Cornwall Insight has predicted that the annual household bill for gas and electricity will drop from £1,928 to £1,620.

The cost of living crisis led to an increase in energy prices, putting a financial strain on households across the country. 

However, analysts have suggested that by April the prices could decrease, with a further fall in the summer of 2024.

Ofgem are due to set their price cap for the second quarter of the year. The price cap currently stands at £1,928 - which is 7p per kilowatt hour for gas and 29p per kilowatt hour for electricity.

The annual bill for typical usage would drop to £1,620 if the forecast is correct, and to £1,497 a year in July. However it would rise slightly again in October to £1,541.

Craig Lowrey, Principal Consultant at Cornwall Insight said: "Healthy energy stocks and a positive supply outlook are keeping the wholesale market stable. If this continues, we could see energy costs hitting their lowest since the Russian invasion of Ukraine.”

Energy prices have been one of the main factors of the UK’s inflation, leading to households being unable to cover bills. It has been reported that nearly £3 billion is owed to energy companies. 

Wholesale oil prices could also lead to a rise in energy prices, Lowrey explained: "Concerns that events in the Red Sea would lead to a spike in energy bills have so far proved premature, and households can breathe a sigh of relief that prices are still forecast to fall,though recent trends hint at possible stabilisation, a full return to pre-crisis energy bills isn't on the horizon."