The energy price cap rose on 1 January 2025, meaning households will be paying more for their energy usage.
And Cornwall Insight’s latest forecast for the April 2025 cap shows that it is now expected to increase to £1,785 per year for a typical dual fuel consumer. This is a rise of almost 3% on January’s cap of £1,738 per year, which itself was a rise from October’s cap.
Energy regulator Ofgem tends to revise its price cap every three months, and the announcement of the April cap is due around the end of February.
It isn’t all bad news, however, as Cornwall Insight is currently predicting that the July price cap will see a decrease from April’s one.
And early last year, Ofgem announced it was looking to introduce a new energy price cap based on the time of day that households use energy.
‘Remain cautious of predictions’
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “The news of a rise in our forecast will be disappointing to households, who will no doubt have been hoping for relief from recent cap rises. However, the turbulence in wholesale markets – a level of volatility we haven’t seen for months – reminds us to remain cautious of predictions, which could very well increase or decrease several times before the April cap is set.
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“With a Trump presidency on the horizon and an uncertain geopolitical situation in the Ukraine and the Middle East, wholesale market volatility looks set to remain. To add to the wholesale turbulence, other cost measures being decided upon by Ofgem and the Government have the potential to move the cap up or down. As we look ahead, consumers must brace for continued fluctuations.”
He continued: “Ultimately, the security of energy supply and Ofgem’s evolving policies will shape the trajectory of bills as we move into 2025 and beyond. It’s crucial for policymakers and industry stakeholders to work together to ensure fair and sustainable energy pricing for households.”
Elise Melville, energy expert at Uswitch.com, said: “The sudden change from a 1% to 3% increase in the April price cap prediction suggests that energy prices will remain uncertain into next year.
“This prediction would mean the average household on a standard variable tariff would pay 3% more on their rates from April – on top of the 1.2% increase in January that consumers will be paying from tomorrow.
“Forecasts get updated as conditions change, so this 3% rise isn’t guaranteed, but energy prices continue to be unsettled.”
Melville continued: “Right now, there are a range of fixed deals available [that] offer significant savings versus the January price cap. The average household could save up to £148 per year against the current price cap by switching to a 12-month fixed deal.
“Anyone who is worried about paying their energy bill should contact their supplier, who may be able to offer support.”
