Respected energy industry consultancy Cornwall Insight says the price cap for the April to June period this year – to be announced this week – is likely to be the lowest for two years. 

“Based on our analysis, for a typical dual fuel household we predict the April price cap to be £1,635 per annum. This is a fall of 15 per cent from the current price cap which was set at £1,928 per year for a typical consumer” says the consultancy.

This will be of particular benefit to private rental tenants: the Generation Rent campaign group claims that, in the 13 years from 2010 to the start of last autumn, fuel poverty had fallen by 35 per cent among owner-occupiers and by 54 per cent among council tenants, but by just four per cent for private renters.

Ofgem’s formal announcement will be made on Friday. Cornwall Insight is forecasting the cap will continue to decline in July, with a small rise in October. However, the latest projections indicate that the cap will stay below the current level until the end of the year.  

The consultancy says: ”Lower overall price cap predictions suggest the UK has, for now, weathered the storm of Red Sea tensions, securing a steady supply … through the Atlantic. Good availability of cargoes in Europe and Asia, in part due to mild weather, has contributed to the drop in prices.”

Dr Craig Lowrey, principal consultant at Cornwall Insight, says: “Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis.

“Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we mustn’t get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.

“Even with the drop, prices will remain a struggle for many. We need to remember, bills remain hundreds of pounds above pre-pandemic levels, and if we don’t speed up the switch to sustainable energy and cut down on volatile imports, they are likely to stay that way.”