Energy bills will continue to rise for at least the next four years, a group of leading economists warned today.
The Centre for Economics and Business Research has predicted that household finances will be strangled until 2026 in more grim news for millions of Britons who face a ‘tsunami’ of more expensive bills.
Douglas McWilliams, deputy chairman of the Cebr, said: ‘People can put up with high costs if only for a short period, but what our model suggests is, unless the Ukraine situation resolves itself, prices are likely to be high but falling for three or four years.’
Mr McWilliams believe that it will not change at all until Britain gets a grip on its energy security, particularly for gas.
‘It is a tough scenario for people to live with,’ he told the Daily Telegraph, adding: ‘They are going to have to get used to higher prices. They are going to have to learn to economise.’
The Cepr believes that a therm of gas, that spiked at 800p after Russia’s invasion of Ukraine, will drop to an average of 180p by the end of the year. It will then drop to 160p in 2023 and 2024, down 10p to 150p in 2025 and then down to 118p in 2026.
Households’ sky-high energy costs could reach nearly £400 for gas and electricity in a single month next winter, experts have warned.
Around 22million homes saw their gas and electricity bills increase by 54 per cent as the new price cap came into force last week.
The rise, which came as temperatures fell below freezing again, will add nearly £700 to the average annual bill as the nation battles a cost of living crisis.
But many customers say suppliers have hiked their direct debit payments by even more than this – with some demands doubling.
Government economists have forecast that the Ukraine crisis and soaring cost of wholesale energy means the price cap will have to rise another 42 per cent in October to reach £2,800 for the average household.
It means those living solely off the state pension could see their income obliterated by heating costs.
Comparison site The Energy Shop said heating and powering the average home will cost £1,859 between October and March – peaking at £395 in January when temperatures hit their lowest.
Several supplier websites crashed on Thursday as customers rushed to submit meter readings before prices rocketed.
The price cap stood at £1,138 for the average family last year but was lifted to £1,277 in October.
If it is hiked again to £2,800 in October, as predicted by the Office for Budget Responsibility last week, older households will be forced to put most of their state pension towards heating.
Onshore wind farms will not be forced on rural areas in England despite a drive to expand domestic energy generation, the Government has said.
Ministers are leaving the door open to relaxing planning laws that have largely prevented their development since 2015 – but communities must consent to them.
It means new sites will likely be confined to Scotland, Wales and Northern Ireland, where planning rules are less restrictive.
Boris Johnson also wants more offshore wind and is said to have called for a ‘colossal wind farm you can float out into the middle of the Irish Sea’.
The Prime Minister is expected to finally unveil his delayed energy security strategy on Thursday after weeks of wrangling over the cost of a massive push for nuclear.
Up to seven new nuclear power stations could be built by 2050 as part of the Government’s ambition to reduce Britain’s reliance on the international energy market following Russia’s invasion of Ukraine.
Business Secretary Kwasi Kwarteng said the UK should ‘aspire’ to nuclear making up a quarter of the energy generation mix.
‘But obviously, you’re not going to suddenly have six new nuclear stations in the first three years.
‘I mean, it’s physically impossible to do that,’ he told the Sunday Telegraph.