UK Energy Prices Expected To Decline, Calls For Long Term Solutions

Cornwall Insight has projected a 7% decrease in the energy price cap for July-September 2024, predicting it will fall to £1,574 per annum for a typical dual fuel household, down from £1,690.

This decrease contributes to a 25% reduction in energy prices over the past year, resulting in costs about £500 lower than in July 2023. However, despite these decreases, energy prices remain notably higher than pre-crisis levels, raising concerns about long-term affordability for consumers.

Looking ahead, Cornwall Insight anticipates a slight increase in the cap in October, followed by another reduction in January 2025.

Government Action To Permanently Reduce Energy Costs

Mike Thornton, Chief Executive of Energy Saving Trust, welcomed the lower prices but emphasised the need for ongoing government action to reduce energy costs permanently and support the transition to net zero.

Mr Thornton said: “A key issue is that the relative cost of electricity has increased to around four times as high as the cost of gas. The continuing distortion of electricity prices is undermining the roll out of heat pumps, slowing down the move away from expensive and polluting fossil fuels in our homes.

“While the UK Government has committed to reviewing the way gas and electricity is priced more broadly, disappointingly it’s unlikely we’ll see tangible changes soon.

“A decision needs to be made in the short term to lower heat pump running costs and give people and industry a clear signal that low carbon heating will be part of a net zero future.

“There is no time for delay. No one should take this lower price cap as a sign of stability, with forecasts showing that energy prices are set to rise again this autumn and will be staying high overall for the next decade.

“We still urgently need policies that support people to use less energy and install cost effective energy efficiency improvements in their homes, to bring down energy bills and carbon emissions for the long term.”

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