Cornwall Insight’s Final Forecast For The April Price Cap

Cornwall Insight has announced its final forecast for the April-June Q2 2024 Default Tariff Cap (price cap) following the closure of the observation window on 15 February.

Based on analysis from Cornwall Insights, for a typical dual fuel household it is predicted the April price cap to be: £1,635 per annum. This is a fall of 15% from the current price cap which was set at £1,928 per year for a typical consumer.

Bad Debt Allowance

Figures include the new £16 bad debt allowance, however its inclusion in the cap has not yet been officially confirmed by Ofgem. There also remain a number of ongoing consultations by Ofgem into the level and composition of the cap, the outcome of which is unknown at present. As such, there is the prospect of additional costs being included in the cap, which are not included in forecasts, once the regulator has made its decisions

Price Cap Predictions

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.

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

UK’s Strong Reliance On Imported LNG

Despite the positive outlook, the UK’s strong reliance on imported LNG means geopolitical insecurities remain a threat to energy supplies and therefore consumer bills.

The official cap announcement by Ofgem is scheduled for 23 February.

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