Households brace for ‘devastating’ rise in Britain’s energy price cap – business live

From 41m ago 07. 01 Ofgem lifts Britain’s energy price cap to £3,549 Millions of households in Great Britain face a leap in energy bills from October after the regulator raised the maximum that suppliers can charge, meaning average homes face paying £3,549 a year. As feared, Ofgem has approved a sharp rise in the current price cap, up from £1,971, for the average dual-fuel tariff – an increase of 80%.

The move will intensify the UK’s cost of living crisis, with inflation already over 10%, and add to pressure on the government to announce a new package of support. Details and reaction to follow… Updated at 07. 02 BST Key events 14m ago Zahawi says he is working flat out on energy support plan 27m ago Ofgem: government must act to tackle rising prices 35m ago Ofgem: prices could get significantly worse through 2023 41m ago Ofgem lifts Britain’s energy price cap to £3,549 1h ago Truss promises ‘immediate support’ to fight energy crisis, if she becomes PM 1h ago Starmer: rising energy bills will be devastating for people and businesses 1h ago Full story: Labour calls for emergency budget as energy cap set to top £3,500 1h ago Introduction: Ofgem to announce energy price cap today Filters BETA Key events ( 10 ) Ofgem ( 13 ) UK ( 5 ) Liz Truss ( 5 ) Rishi Sunak ( 3 ) Jonathan Brearley ( 3 ) 6m ago 07.

36 Ofgem’s price cap hike means energy bills will be almost triple their level last winter, when the price cap on the average dual fuel bill was £1,277: An 80% rise from what it is now but a 178% rise from what it was at the same time last year. https://t. co/2VuCCsni60 — Sam Freedman (@Samfr) August 26, 2022 On current projections by April energy bils will have risen by 325% from winter 2021/22 to spring 2023.

— Sam Freedman (@Samfr) August 26, 2022 9m ago 07. 34 The government needs to get a grip now, if it is to avert a major winter energy crisis, says Miatta Fahnbulleh , chief executive of the New Economics Foundation. .

@Ofgem have confirmed what we have suspected for weeks. The energy price cap is set to rise to levels that will be catastrophic for some families this winter if the govt does not step in. We need urgent action and we needed it yesterday.

Here is what the govt should do. . 1/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 In the short term: – Freeze the #pricecap for the next 6 months whilst it puts in place a new system of free basic energy with rising tariffs for higher energy use.

2/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 – Increase the #windfalltax on excessive oil and gas profits and use this to provide a #costofliving payment to low and middle income families to cushion the blow of rising prices. This should be combined with action for the medium term to: 3/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 – Disrupt our #energymarket so that it is no longer dominated by a few #fossilfuel giants, by creating public-owned co-operatives that can flood the market with cheaper #renewableenergy and sell it directly to customers 4/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 – Insulate 19m of the UK’s draughty homes to reduce energy bills and emissions and keep us warmer. – Boost incomes by increasing the national #LivingWage to reflect the true cost of living, and raising benefits to ensure people can afford the basics they need to live.

5/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 There is still time to avert a major winter crisis. But we need the government to grip this and act. 6/6 — Miatta Fahnbulleh (@Miatsf) August 26, 2022 14m ago 07.

29 Zahawi says he is working flat out on energy support plan Chancellor Nadhim Zahawi says the government was “working flat out” to develop a new package of support for consumers. Responding to the 80% jump in the price cap, Zahawi says: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible. ” Energy price cap for October up to £3,549.

Chancellor Nadhim Zahawi says this will cause “stress and anxiety” for many. No new support from this government, but Chancellor says he’s working “flat out to develop options” for the next PM to introduce. https://t.

co/7uKJgMY04G — David Wallace Lockhart (@BBCDavidWL) August 26, 2022 But six months ago , the government had a package of support ready to coincide with Ofgem’s previous price cap announcement. This time, the Conservative leadership campaign means millions of households must wait to see what help will be provided. It’s also not clear if Zahawi will get to implement the plan – with strong rumours that Liz Truss would appoint Kwasi Kwarteng as her chancellor.

Zahawi faces shortest chancellorship since 1970 – and may be glad of it Read more Updated at 07. 30 BST 21m ago 07. 22 Jonathan Brearley has also told Radio 4’s Today Programme that the October price rise will be ‘devastating’ for households, and called for urgent and decisive action from the next PM: Jonathan Brearley, head of Ofgem, says price rise will be ‘devastating’ for families He warns that prices ‘look like they are continuing to rise this Winter’ He says this is beyond the capacity of the regulator to address – the next PM needs to act ‘urgently and decisively’ — Steven Swinford (@Steven_Swinford) August 26, 2022 Ofgem boss Jonathan Brearley admits the massive rise in the price cap is “devastating” for households “This is beyond the capacity of the regulator to address – its 10 days until we have a new PM…the next PM will have to act urgently to address this” — Kate Ferguson (@kateferguson4) August 26, 2022 27m ago 07.

15 Ofgem: government must act to tackle rising prices Ofgem is urging the next Prime Minister and their cabinet to provide “an additional and urgent response” to continued surging energy prices. In an admission that the scale of the energy crisis is beyond the regulator’s powers, CEO Jonathan Brearley says: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year. We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us.

With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this. ” 29m ago 07. 13 Ofgem acknowledges that surging energy prices will cause hardship in the months ahead: Chief executive Jonathan Brearley says he knows the “massive impact this price cap increase will have on households across Britain”.

. css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} I talk to customers regularly and I know that today’s news will be very worrying for many.

Brearley points the blame at Moscow, for squeezing gas supplies to Europe, driving up wholesale prices: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The price of energy has reached record levels driven by an aggressive economic act by the Russian state.

They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap. 32m ago 07.

10 As well as lifting the price cap by 80%, Ofgem has also today strengthened the rules around direct debits to ensure suppliers set them at the right level. This should meaning that customers only pay exactly what they need to, the regulator says, adding: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} The changes will stop suppliers from building up excessive customer credit balances and using them in a risky way as working capital. 35m ago 07. 08 Ofgem: prices could get significantly worse through 2023 Ofgem also warns that the market for gas in winter means that “prices could get significantly worse through 2023”.

It isn’t giving price cap projections for January, when the cap will next change, “because the market remains too volatile”. 38m ago 07. 05 Ofgem says the increase in energy bills reflects the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and have been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.

41m ago 07. 01 Ofgem lifts Britain’s energy price cap to £3,549 Millions of households in Great Britain face a leap in energy bills from October after the regulator raised the maximum that suppliers can charge, meaning average homes face paying £3,549 a year. As feared, Ofgem has approved a sharp rise in the current price cap, up from £1,971, for the average dual-fuel tariff – an increase of 80%.

The move will intensify the UK’s cost of living crisis, with inflation already over 10%, and add to pressure on the government to announce a new package of support. Details and reaction to follow… Updated at 07. 02 BST 44m ago 06.

58 Aubrey Allegretti Liz Truss doubled down on her reluctance to “bung more money” at those who will struggle to afford spiralling energy costs this winter, while Rishi Sunak said millions may be forced into destitution without extra support, as the pair clashed at the penultimate hustings of the Conservative leadership race last night. With energy regulator Ofgem expected to raise the price cap to £3,500 a year from October for the average dual-fuel tariff, Truss warned the issue of spiralling fuel costs was not a short-term one. She told the audience in Norfolk: .

css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “If people think this problem is going to be over in six months they are not right. This is a long term problem.

” But Sunak said her planned tax cuts would fail to help pensioners and those on lower incomes, and added that extra support for businesses struggling with energy bills was “clearly something the new prime minister will have to look at”. Truss and Sunak clash on energy costs at penultimate Tory hustings Read more 53m ago 06. 49 The union Unite has accused energy companies of “rampant corporate profiteering”, adding to the cost of energy.

Unite has calculated that major energy suppliers, distributors and generators had made a combined £15. 8bn in profits in the past year. Unite general secretary Sharon Graham claims “rampant corporate profiteering is at the very heart of soaring energy bills”.

Unite national officer for energy, Simon Coop, said: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Ofgem is a regulator which doesn’t regulate.

It appears to simply be passing the parcel of the energy giants’ profits directly on to the consumer. It’s clear that piecemeal action will not solve the scale of these problems. Sooner or later taking the energy giants back into public ownership will have to be contemplated.

” 1h ago 06. 44 Almost half of Britons questioned on the UK’s current energy crisis blame the Government more than the energy firms, according to a new poll. Research by Focaldata of 1,021 adults from across the UK showed that 47% of respondents blame ministers for “failing to prepare and prevent” the huge rise in energy bills.

Just under a third, 30%, condemn the energy firms. The polling, on behalf of Cavendish Advocacy found that 92% of people who took part are “concerned” about the energy crisis, with two-thirds “very concerned”. Tom Bradley , head of energy & green growth at Cavendish Advocacy , said the situation will get worse once the price cap is announced.

. css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The debate has moved on as to how the country has reached a critical point where energy bills may top more than £3,500 a year.

“Our polling shows that the public expects both politicians and the energy industry to take responsibility and bring more stability and affordability to the market. “Surprisingly, almost a fifth of UK adults are willing to pay more if the money was invested in better infrastructure to prevent potential blackouts or gas supply issues. “The cost of living is the core issue dominating our politics right now, and that is being driven by soaring energy prices.

The public will be looking on with much interest on Friday as to what politicians and the industry do next to try and mitigate this energy crisis. ” 1h ago 06. 40 Truss promises ‘immediate support’ to fight energy crisis, if she becomes PM British Foreign Secretary and Tory leadership candidate Liz Truss at the Conservative Party leadership election hustings at the Holiday Inn Norwich North last night Photograph: Tolga Akmen/EPA Liz Truss, the front-runner to succeed Boris Johnson as prime minister, has pledged ‘immediate support’ to help the hardest hit families with soaring power bills if she becomes prime minister.

Writing in the Dail Mail , Truss (who has previously favoured tax cuts over ‘handouts’) says: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The impact on our cost of living is clear at the supermarket checkout, at the petrol pump and on our latest energy bills.

“I know how hard it is for millions of Britons, and how grave concerns are about the consequences of today’s decision by Ofgem on the next energy price cap. “The rest of Europe is facing the same challenge, which will loom large as winter sets in. “If I am elected leader of the Conservative Party and prime minister, I will take decisive action on entering No 10 to provide immediate support, but will also tackle the root causes of these issues so we are never again in this difficult position.

“To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times. ” My immediate priority will be to put more money back in people’s pockets by cutting taxes, such as reversing the rise in national insurance. I would also suspend the green levy on energy bills, bringing down average energy bills by £153.

This will build on the work already underway, such as the Energy Bills Support Scheme, which will see a £400 discount paid to consumers from October, and the £1,200 package of support for the most vulnerable. More here: Truss unveils plans to beat energy crisis: Tory leadership favourite ‘will give multi-billion bailout to hardest-hit families’ as price cap rockets to £3,500-a-year from TODAY and reveals she will hold emergency budget DAYS after entering No10 if she wins 1h ago 06. 33 Starmer: rising energy bills will be devastating for people and businesses Labour leader Sir Keir Starmer during a visit to the Juniper House housing development in Walthamstow, east London, to see how families will save money on their energy bills through the installation of heat saving measures this week.

Photograph: Stefan Rousseau/PA Keir Starmer MP, Leader of the Labour Party, has warned that the energy price cap rise will be ‘devastating’: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The announcement of a dramatic increase in the cost of energy bills is going to be devastating for people and businesses across the country.

“Labour’s fully-funded plan to freeze bills and save households £1,000 this winter is a simple matter of common sense and fairness. We will not allow oil and gas giants to make record profits from the suffering of ordinary families and businesses. It’s astounding the government does not understand this.

“As well as acting to fix the immediate problem, Labour will also bring down bills in the long-term by investing in sustainable British energy and insulating homes across the country. “The fact the government is absent at this time of national crisis is unforgiveable. Families and business owners are worried sick.

Everyone is now feeling the harsh reality of the Tories’ failure. The country deserves strong leadership, urgent action and a plan for the future. Only Labour can give Britain the fresh start it needs.

” 1h ago 06. 33 Full story: Labour calls for emergency budget as energy cap set to top £3,500 Alex Lawson Wih pressure mounting for an emergency budget to tackle the cost of living crisis, stark data showed that Britons are already worried about bills this summer despite low energy usage compared with the winter peak. A YouGov poll showed about 40% of 1,700 adults surveyed have struggled with food and energy bills over the past three months.

Around three-quarters of those polled said the government is doing too little to help those struggling with the recent rise in the cost of living, including two-thirds of Conservative voters. The shadow chancellor, Rachel Reeves , said: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The only people resisting measures to help people are the government. We wanted parliament to be recalled ahead of the [Ofgem] announcement but that did not happen. “We want an emergency budget.

We want the government to say what they are going to do. This announcement is going to strike fear into the hearts of families up and down the country. Urgent action is needed.

Everyone has come up with plans for action apart from Liz Truss and Rishi Sunak – the two people who can actually do something about it – who have been silent. ” Here’s the full story: Labour calls for emergency budget as energy cap set to top £3,500 Read more 1h ago 06. 31 Introduction: Ofgem to announce energy price cap today Good morning.

The scale of Great Britain’s winter energy crisis will be laid bare this morning, when regulator Ofgem announces how high the price cap on bills will rise in October. Ofgem is expected to approve a record increase, lifting the average annual dual-fuel tariff in England, Scotland and Wales to above £3,500 a year from October for the average dual-fuel tariff. That would be an staggering increase of 80%, from the current average cap of £1,971.

The surge in gas prices this year due to the Ukraine war, and Russia’s cuts to European energy supplies, mean households and businesses face very painful increases in bills. The day-ahead price of UK gas over the last two years Photograph: Refinitiv Millions more homes face being pushed into fuel poverty, while firms (who aren’t covered by the price cap) are warning that they will not be able to keep operating without help. Analysts predict that prices will keep rising in 2023 too.

Cornwall Insight , the energy consultancy, have estimated annual bills will surge again to £4,649 from January to March, and £5,341 from April to June. Other analysts have predicted even higher rises, as wholesale gas prices have soared in recent weeks. This energy shock will need fresh government support, economists insist, on top of the cost-of-living package announced in May.

What can the Government do about soaring energy bills and the #costoflivingcrisis ? Read our 50-page new report here: https://t. co/2Ve7lTBV2c and listen to a useful summary from RF’s @FryEmily here: pic. twitter.

com/Zm6hRj2n1I — Resolution Foundation (@resfoundation) August 25, 2022 Labour have already called for an emergency budget, and a freeze in bills this winter, costing an estimated £29bn. It says the two candidates to lead the Conservative Party have failed to grasp the scale of the crisis, even though two-thirds of households, or about 45 million people, could be pushed into fuel poverty by January. Rishi Sunak has promised to scrap VAT on energy bills and an as yet uncosted increase in help for households on benefits, while Liz Truss has pledged assistance “across the board” for companies and households.

Chart of the Day: Liz Truss and Rishi Sunak’s proposals to help with energy bills fall short of what is needed, but there are issues with Labour’s plan too. https://t. co/kCnkxw1cIN pic.

twitter. com/6xm0vR4G1j — The New Statesman (@NewStatesman) August 25, 2022 Yesterday, education minister Will Quince pledged there would be more support on top of Sunak’s initial energy package three months ago. “There is no question in my mind whatsoever, both listening to the two leadership candidates but also just looking at our economy … that the Government is going to act and put in place a further package of support measures,” Quince told LBC radio.

. css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “Now, we will have to wait a couple of weeks for a new Prime Minister to set out their agenda alongside a new Chancellor, but both leadership contenders have been clear there will be a fiscal event and more help will be coming.

” Ofgem’s announcement is expected at 7am. Also coming up today: What’s said to be the UK’s biggest strike of the summer is taking place today, as Royal Mail staff hold industrial action in a pay dispute. More than 100,000 postal workers are expected to take part, as the Communication Workers Union (CWU) pushes for a wage rise to reflect soaring inflation.

The CWU says it’s rejected a 2% pay rise, pointing out that: . css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “In an economic climate where inflation looks set to soar to 18 per cent by January 2023, the imposition will lead to a dramatic reduction in workers’ living standards”.

But Royal Mail says its deal is worth 5. 5% (still below inflation), if workers accept new terms and conditions including more Sunday deliveries, as it tries to compete for more parcel delivery business. Central bankers are gathering in Wyoming for the annual Jackson Hole economic symposium, where the fight against persistent global inflation will be high on everyone’s mind.

Jerome Powell , the head of America’s central bank, will give an eagerly-awaited speech at 3pm UK time. Investors will watch whether Powell reiterates the Federal Reserve’s stance of raising interest rates to cool prices, or hints at a pivot, as major economies slip towards recession. We think Chair Powell should send a “pivot” signal tomorrow, i.

e. a transition to slower rate hikes going forward. The global economy is going into recession, led by the Euro zone, and growth is very weak in China.

That will inevitably spill back into the US and slow inflation. . .

pic. twitter. com/neDlNNwlgE — Robin Brooks (@RobinBrooksIIF) August 25, 2022 The agenda 7am BST: Ofgem announces UK price cap changes 7am BST: GfK’s German consumer confidence survey 1.

30pm BST: US PCE index of inflation for July 3pm BST: Federal Reserve chair Jerome Powell speaks at Jackson Hole 3pm BST: University of Michican’s consumer confidence index for August Topics Business Business live Energy bills Household bills Energy industry UK cost of living crisis Reuse this content.