Energy price cap to increase by £139

The energy regulator has said those on default tariffs paying by direct debit will see a price increase of £139, going from £1,138 to £1,277. In addition to this, prepayment customers will see an increase of £153 from £1,156 to £1,309.

The increase has been driven by a more than 50% rise in energy costs over the last six months with gas prices hitting a record high. Alongside this, the surging global fossil fuel prices have been driving up inflation for consumers - meaning fixed rate energy tariffs are not covered by the price cap.

Commenting on the news, Ofgem’s chief executive Jonathan Brearley, said: “Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.

“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less. If you’re struggling to pay your bill you can get in touch with your supplier to access the help that’s available and if possible, shop around for a better deal.

“We have put tough rules in place to ensure suppliers treat customers who are struggling with bills fairly, and welcome their commitment to reach out to those who most need help this winter. Where help is not forthcoming, we will not hesitate to act.”

Gas prices have also risen to a record high in Europe due to a recovery in global demand and tighter supplies. This is increasing the cost of heating homes and pushing up electricity prices.