In July, Ofgem’s energy price cap will drop. This change would reduce the cost of the payments for up to 22 million households in England, Wales, and Scotland. In fact, independent experts are already forecasting an almost 9% decrease. If it goes through, the cap will reach its lowest point since September of 2022. This policy reversal further reflects a dramatic turn in the domestic energy marketplace. For these dual-fuel customers paying by direct debit, their average annual bill will fall by £166 to £1,683 on average.
Ofgem announces changes to the energy price cap every quarter. This regular reset can lead to added volatility for families’ energy costs. Over the same period last year, the average annual bill was £1,568. The trend shows a historic change in energy costs. After three increases in a row in Ofgem’s price cap, the U-turn we are seeing now is the opposite direction trend.
The critical dynamic force in driving these changes is market dynamics. US tariff policies and an unusually warm winter across Europe have played major roles in shaping energy pricing. All of these factors combined are creating an entirely new market environment. Cornwall Insight, the company behind the reputable forecast, has been tracking these daily closely. They are looking for positive news on the horizon for consumers.
Craig Lowrey, a principal consultant at Cornwall Insight, said people should avoid celebrating too early and focus on measured optimism.
“While a fall in bills will always be welcomed by households, we mustn’t get ahead of ourselves. We have all seen markets go up as fast as they go down, and the very fact the market dropped so quickly shows how vulnerable it is to geopolitical and market shifts,” – Craig Lowrey, principal consultant at Cornwall Insight.
This anticipated decrease in energy bill payments provides a welcome break to families who have been burdened by increasing expenses over the past months. Experts cautioned that these spikes are a sign of deeper vulnerabilities in the market.
