Energy business | UK electricity costs will increase by 80%

Starting in October, the consumer price cap was increased to £3,549 per year.

Energy costs will increase by 80% for British homes starting in October, the government regulator Ofgem stated on Friday. The annual price cap will rise from the present $2,323 ($1,971) level to $4,183 ($3,549).

The increase will have a "huge impact" on families all around the country, according to Jonathan Brearley, chief executive of Ofgem, and another increase is likely to occur in January due to the high volatility of the energy markets.

To address the effects of the price increases that will take place in October and the next year, it is evident that the incoming Prime Minister will need to take additional action, according to Brearley. The answer must be appropriate for the magnitude of the problem at hand.

Due to significant pricing pressure in the energy markets, the regulator said earlier this month that it will change the cap every three months rather than every six.

In response to the most recent rise, Ofgem stated that due to the market's extreme volatility, it would not provide estimates for January, when the next cap will go into place. The regulator did caution that through 2023, energy prices could "seriously worsen."

Comparing the new average household energy bills to those from October 2021, when they were £1,277 ($1,505), the difference is over three times. The price increase had a significant role in driving UK inflation to a 40-year high.

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