Closing summary: Uncertain future for UK energy system after price cap cut
The average cost of an annual household energy bill in Great Britain has dropped below £2,000 for the first time in 18 months, but that average masks the fact that some people – and particularly the poorest – will see the amount they pay for energy rise compared to last winter.
Everybody acknowledges the price cap system is broken. Chris Hayes, a senior analyst at Common Wealth, a left-of-centre thinktank, said:
The Ofgem price cap regulates the selection of deckchairs on offer to the passengers of the Titanic. Its original purposes was to prevent retailers from exploiting consumer inertia by companies stealthily raising their default tariffs.
Today it simply caps how much of the pain from elevated wholesale prices retailers can pass onto consumers versus energy suppliers absorbing the shock themselves. Meanwhile, the wholesale energy market is governed by catastrophic dysfunction — not least by electricity prices being set by the price of gas. This system needlessly copy-pastes the soaring prices in the 40% of our electricity mix coming from gas, onto the remaining 60%. This will plunge us back into crisis the next time gas prices spike.
But what will replace the price cap – and when – is totally unclear, as the Guardian’s Alex Lawson writes.
Even the energy regulator presiding over the cap, Ofgem’s Jonathan Brearley, has admitted the mechanism is “very broad and crude” and has called on ministers to implement a “more rigorous framework” to protect consumers. But the next step looks far from simple and the government does not appear to be giving the problem much thought.
The cap, originally introduced to prevent loyal customers who did not switch supplier from paying more, appears to be the wrong tool for today’s crisis. As energy prices increased, it held prices down, and was blamed for sending 29 suppliers bust, leaving consumers with a £2.7bn tab. At the same time, it is set too high to help the estimated 6m households who simply cannot afford to properly heat their homes.
It is rare to have debt campaigners and thinktanks associated with the Tory right singing from the same hymn sheet, but they have found common cause in calling for social tariffs: subsidised tariffs for households who cannot afford to pay the full whack.
But that comes with political problems as well. You can read Alex’s full analysis here:
In other business and economics news today:
The UK and India hope to be able to complete a free trade agreement as soon as this year, according to India’s finance minister.
Union leaders have called for Wilko’s 12,500 employees to be prioritised, after a deal that could have rescued jobs at the ailing budget chain was rejected because its debt holders could recoup more from a break-up of the business.
A “significant minority” of landlords and letting agents may not be following consumer protection rules, according to the UK’s competition watchdog, which raised concerns including complaints about onerous guarantees, discrimination against certain types of tenants and fees charged to older people entering retirement housing.
Farmers in England are being left without crucial nature recovery payments and unsure of what to plant after delays to a post-Brexit scheme.
Germany’s economy may be heading for the third quarterly contraction in 12 months after weak economic sentiment data.
You can continue to follow the Guardian’s live coverage from around the world:
In our coverage of the Russian war on Ukraine, the Kremlin says it is an “absolute lie” it was behind plane crash and refuses to confirm Prigozhin’s death
In the US, Donald Trump is defiant after surrendering on election interference charges
In the UK, Tory frustration with Nadine Dorries grows as a former party whip calls for clarity
Thank you for following our live coverage of business, economics and financial markets this week. Please do join us bright and early on Tuesday (after the UK’s bank holiday) for more. JJ
Wilko rescue deal rejected, with unions calling for jobs to be prioritised
Union leaders have called for Wilko’s 12,500 employees to be prioritised, after a deal that could have rescued jobs at the ailing budget chain was rejected because its debt holders could recoup more from a break-up of the business.
Doug Putman, the Canadian entrepreneur who rescued HMV from administration in 2019 and returned it to profit, is understood to have been attempting to take on at least 200 of the group’s 400 outlets and continue operating them under the Wilko brand, saving jobs and helping keep orders flowing for suppliers.
Sources said that Putman had been in talks with Wilko’s administrators at PwC for at least two weeks but his offer could not match the cash raised from liquidating the chain’s assets, including its leaseholds and stock. Wilko’s biggest creditor is restructuring specialist Hilco, which loaned the company £40m shortly before it went bust.
There is an interesting move on the FTSE 250 today: retailer Watches of Switzerland has lost a fifth of its value after Swiss watch brand Rolex bought a rival retailer Bucherer.
Bucherer said it was selling because of owner Jörg Bucherer’s choice to sell the business, given he has no direct descendants to carry on the company. However, analysts said it could pose problems for the UK-based retailer, Watches of Switzerland, for whom Rolex is a key supplier.
Jonathan Pritchard of Peel Hunt, an investment bank, wrote:
Rolex suggests that its relationship with Bucherer will not change and it will remain independent. That is almost impossible to believe: for example, there are 48 stores that do not sell Rolex: that may change.
If our suspicion is right and the shape of global Rolex allocations evolves, it is unlikely to be a positive for WOS: around 50% of its sales are Rolex, so other brands will have to step up but sentiment will be harmed.
Eleonora Dani, an analyst at Shore Capital, another investment bank, said it was a “significant shift in the landscape as Rolex takes ownership of a company with which it has maintained a close and mutually beneficial relationship for nearly a century.
However, the deal could raise competition regulators’ interest, she added.
Updated
It looks like stock markets on Wall Street are going to gain ground to end the week, ahead of an important speech by Federal Reserve governor Jerome Powell.
Futures trades indicate the Nasdaq will gain 0.4%, and the Dow Jones industrial average and the S&P 500 will gain 0.5% apiece.
The Chinese property industry has been in crisis mode for more than a year, to the point that some analysts think the bursting of the bubble will derail growth. For the companies who grew rapidly during the boom years, the pain keeps on coming.
The latest development is that the second-largest private property developer is on the verge of losing its coveted investment-grade rating from credit ratings agency Moody’s.
Reuters reports:
Moody’s downgraded China’s second-largest private property firm Longfor’s credit ratings to Baa3, the lowest rung of investment grade, on Friday and put it “on review” for a further downgrade.
“The rating downgrade reflects our expectation that Longfor’s credit metrics and liquidity buffer will decline amid slowing contracted sales, continual margin pressure and still constrained funding access to the debt capital markets,” said Kaven Tsang, a Moody’s senior vice president.
“The review for (another) downgrade reflects high uncertainties over the company’s ability to improve its operating performance and recover its access to funding amid uncertain market prospects and volatile funding conditions”.
Other companies who are struggling include Evergrande, whose US arm filed for bankruptcy protection last week, and a host of smaller developers who are hoping against hope that the Chinese government will step in to bail them out.
India-UK free trade deal 'very close' - Indian finance minister
The UK and India hope to be able to complete a free trade agreement as soon as this year, according to India’s finance minister.
Nirmala Sitharaman on Friday said further talks will be carried out as the two sides try to reach an agreement, Reuters reported. Speaking at an industry conference in New Delhi, Sitharaman said:
I won’t be wrong in saying a free trade agreement with UK is very close.
India was once a British colony but the world’s most populous country has a fast-growing economy that has drawn the attention of some British politicians hoping to provide an economic boost after the Brexit vote.
UK business and trade secretary Kemi Badenoch is in India for a meeting of G20 trade ministers, and is expected to continue talks over a deal.
However, those talks are likely to be problematic for some of Badenoch’s colleagues in the Conservative party if they include liberalisation of immigration rules. Home secretary Suella Braverman last year expressed “reservations” about Britain’s trade deal with India because it could increase immigration to the UK.
End of energy trade shock gives space for wage rises says new research
The ups and downs of global energy prices have an obvious impact on household budgets but, as a new piece of research shows, they also affect the big picture macro economy.
A point made consistently by the Bank of England last year was that Britain had became a poorer country as a result of the sky-rocketing cost of gas and that we all had to suck it up.
The message from the Bank of England to workers as they contemplated putting in wage demands to protect their living standards was that the UK’s terms of trade had worsened because import prices were rising faster than export prices. There was no point in seeking compensatory pay awards because they would simply lead to a wage-price spiral.
Threadneedle Street’s governor, Andrew Bailey, and its chief economist, Huw Pill, both got into hot water for making this point.
That was then. As an interesting piece of research by Gerald Holtham and Michael Roberts of the consultancy Independent Economics points out, the adverse terms of trade shock was short-lived and – due to falling global energy prices – has now been more than reversed. As a result, they say, there is no need for workers to continue seeing their living standards eroded. It is not only possible but desirable for wages to rise more quickly than prices.
Real wages are down 4.5%, but there has been no enduring terms of trade loss. By all accounts labour markets are tight, so there is no reason to expect the share of wages to fall to such an extent.
It must be expected, therefore, that increases in average earnings will run ahead of price increases for some time. Calling for wage restraint to lower inflation at this juncture is simply a demand for wage cuts.
Octopus Energy 'in detailed talks' to buy Shell's 1.4m UK energy customers
Octopus Energy is reportedly in “detailed talks” to buy Shell’s UK household energy supply business, as the oil company seeks to end its short-lived foray into the sector.
Shell started supplying energy directly to UK households for the first time after a 2017 takeover, but it put the business up for sale in January after a period in which retail suppliers have struggled to make money amid a global energy crisis.
Octopus has become the frontrunner in talks to take over the business, but other companies are still in contention, Sky News reported on Friday.
A takeover would further entrench Octopus’s position as one of the biggest suppliers after a rapid expansion that has included taking on customers of Bulb, a rival that collapsed during the crisis.
Octopus declined to comment. Shell declined to comment to Sky News.
This chart shows just how unusual the last two years have been in the energy market.
Ofgem’s price cap for British households would have risen to more than £4,000 last winter, had the government not finally stepped in with the energy price guarantee. It has finally dipped back below £2,000. Yet it still remains far above the average before the crisis.
But for many it does not represent much of a let-up in the pressures on them. These data from Citizens Advice show how the problems pile up: as the crisis has continued energy debt levels from those who asked for advice on debt have risen to more than £1,700 – £500 more than before the pandemic.
Germany's economy heading towards third quarterly contraction in 12 months
The UK is not the only economy struggling with inflation: Germany’s economy is showing signs of weakening as well, according to new data.
The Ifo business climate index, which has long tracked the fortunes of Europe’s largest economy, fell to 85.7 for August, down from 87.4 in July. Analysts polled by Reuters had forecast an August reading of 86.7.
The data “strongly suggests that the German economy will contract again in the third quarter after stabilising in the second”, said Andrew Kenningham, chief Europe economist at Capital Economics.
The downturn is broad-based, encompassing all the major sectors, i.e., manufacturing, services, retail and construction.
This chart from Melanie Debono, senior Europe economist at Pantheon Macroeconomics, shows how the Ifo index is a good predictor of German GDP – which in this case is bad news for the Germany economy.
Clemens Fuest, president of the Ifo Institute, said:
Sentiment among German managers has darkened further. This is [the] fourth consecutive fall. Assessments of the current situation fell to their lowest level since August 2020.
Moreover, companies are increasingly pessimistic about the months ahead. The German economy is not out of the woods yet.
What does the energy price cap mean for you? The Guardian’s consumer affairs correspondent, Zoe Wood, has some answers:
Some important points in there. Here is Zoe on prepayment meter customers:
The energy costs of about 4m domestic customers with energy prepayment meters who pay upfront for gas or electricity using an app or by visiting a shop are protected by the cap but it is still a slightly higher figure than for those paying by direct debit.
They used to face a bigger “prepayment premium” until the government stepped in to end it. It is funding a reduction until April 2024, with Ofgem working on a plan to eradicate it permanently after that.
And what help is available for households?
Less than before. The £400 energy support given to all households is not being repeated this year, with the government instead making cost of living payments to about 8 million vulnerable households. This includes a £900 payment for those on means-tested benefits, £300 for pensioners and £150 for disabled people.
If you are struggling, contact your supplier as soon as you can. Under Ofgem rules, suppliers must work with you to agree on a payment plan you can afford.
One important question many people will have is about standing charges: why have they risen?
That is a key reason for why more of the poorest households will pay more, even when the unit price of energy has dropped. Standing charges have risen from an average of £186 a year in October 2021 to just over £300.
There are two main reasons: costs have risen for the “supplier of last resort” regime which keeps supplies going when companies go bust; and costs have risen across the energy industry as part of the economy-wide inflationary pressures.
This story from March explains it in more detail:
Calls for social tariff as many households to pay more for energy this winter
Energy charities have called for the government to introduce a social tariff to help the poorest households through the winter.
The energy regulator, Ofgem, today cut the energy price cap, meaning the average annual dual fuel bill will drop to £1,923 for households in Great Britain. However, other changes – notably an increase in standing charges and the lack of £400 in extra government support – mean that a third of English households will pay more for their gas and electricity bills than they did last year – even if the price per unit of energy is cheaper.
Citizens Advice, National Energy Action, and the End Fuel Poverty Coalition have all called for a social tariff.
Government minister Andrew Bowie on Friday refused to say if a social tariff was under consideration.
James Taylor, executive director of strategy at disability equality charity Scope, said:
Energy still costs more than double what it did two years ago and bills remain excruciatingly high for disabled people.
Many disabled households can’t simply turn off nebulisers or go without energy to charge wheelchairs and hoists.
The government has broken its promise of delivering a social energy tariff. Creating this tariff in time for winter needs to be a political priority.
It is not just charities working with struggling households who think a social tariff would be a good idea. The Centre For Policy Studies, a rightwing thinktank with close links to the Conservative party, has also called for a social tariff, alongside the abolition of the price cap. It argues that the cap “discourages firms from proper competition and offering lower tariffs”, but a social tariff could prevent fuel poverty.
*This post has been corrected: the minister is Andrew Bowie, not Alex as originally written.
Updated
Here is a graph from the Resolution Foundation showing that many English households will see bills rise this winter, despite the price cap fall.
You can see that the poorest households – the left-hand side – are those who will be most affected.
And the wealthiest will be least affected by increases. That is partly because their energy bills are already higher, so they are less affected by the change to the standing charge.
🔖 NEW RF analysis of the latest @ofgem price cap shows that more than one-in-three English households will face higher bills this winter.
— Resolution Foundation (@resfoundation) August 25, 2023
That rises to *almost half* of the poorest households paying more.
💸 13% of all households will be paying £100+ more than last winter 💸 pic.twitter.com/N5KnuSdBlM
There are some important points in our story on the energy price cap drop, from the Guardian’s Jillian Ambrose and Alex Lawson.
The average household will still pay almost double the rate for their gas and electricity than before Russia’s invasion of Ukraine triggered a global energy crisis. Plus, bill payers will not have the benefit of the £400 payment from the government given to all homes last winter.
Ofgem has produced two numbers for the new price cap after changing how it calculates the typical energy bill. The £1,923 figure is comparable with the previous quarter. However, from now on, Ofgem’s cap assumes households will use 7% less electricity and 4% less gas than in previous years, meaning a lower cap of £1,834 when expressed as an annual dual-fuel energy bill for direct debit customers.
You can read the full story here:
Minister: 'Today is a positive day for the British people'
The government minister doing the media rounds this morning is… Andrew Bowie, the minister for nuclear and networks. (He is third in the hierarchy at the energy security department, in case you were asking.)
He told BBC radio’s Today programme that the price cap drop was “welcome” and we should “celebrate the fact” that bills have fallen, and it was a “positive day for the British people”.
The £40bn aid to household last winter was “well spent”, he said. However, he did not say if further support will be offered this winter – as some households will be paying more than the same point last year.
Where it has been required, and where it’s needed, this government has always stepped up.
A reduction of £580 from its peak is a significant drop from where the price cap was. It’s a significant drop in the amount of money that people will have to be spending on their energy bills.
But, he acknowledged: “It is very high.”
He said he could not comment on whether a social tariff is under consideration.
Back to energy bills: National Energy Action, a charity, has estimated the new price cap will leave 6.3m UK households in fuel poverty.
That is an increase from 4.5m in October 2021, just as the energy crisis started as the recovery from coronavirus pandemic lockdowns gained pace.
The crisis accelerated in early 2022, when Russia launched its full-scale invasion of Ukraine. Since then Western allies, particularly in Europe, have been rushing to secure alternatives particularly to Russian gas, meaning there is no prospect of bills falling back to pre-invasion levels any time soon.
National Energy Action also wants a social tariff – a subsidised scheme for the poorest households. That will be a familiar refrain as we approach winter, although there is little sign that the government is so far considering it.
Adam Scorer, the charity’s chief executive, said:
Any fall in the price cap is welcome but for 6.3 million households still in fuel poverty it will make precious little difference. The price cap does not protect those who simply cannot afford the cost of keeping warm. That requires direct government intervention through bill support, social tariffs and energy efficiency.
For a third straight winter, vulnerable households will face stubbornly high bills and an increasing energy debt mountain. This winter there is no Price Guarantee and no £400 Energy Bills Support Scheme. The absence of targeted further financial support this winter to reduce the energy bills of the most vulnerable will mean millions of unheated homes and spiralling debt. It will add to the queues of people for the NHS and for the overstretched resources of charities like National Energy Action.
There’s much more reaction on energy bills to come shortly, but a brief interlude to note that the FTSE 100 has gained 0.2% in the opening trades.
There is not much movement though (on the Friday before the August bank holiday in the UK): only two companies on the FTSE 100 have moved by more than 1% either way.
And investors are clearly not too worried about the Competition and Markets Authority’s study of housebuilders: there are no downward moves of note among the construction contingent.
Elsewhere in Europe, Germany’s Dax benchmark index and France’s Cac 40 are both down 0.2%.
A third of English households to face higher bills this winter - Resolution Foundation
Over one-in-three households across England – 7.2m in total – will face higher bills this winter than last, according to the Resolution Foundation, a thinktank.
The lower price cap for October to December is – at £1,923 – lower than the effective cap of £2,100 last winter (when taking into account £400 of extra support from government). However, while the price per unit of energy is falling, this will be offset by a rise in the daily standing charge and the end of the £400 universal payments, the Foundation said.
The people who lose out will be concentrated in the poorest households. 47 per cent of England’s poorest tenth of households will face higher bills.
One-in-eight households (13%, equivalent to 2.8m households) will see winter energy bills increasing by £100 or more this year, rising to almost a quarter (24%) of those in the poorest tenth of families.
Jonny Marshall, senior economist at the Resolution Foundation, said:
Falling wholesale gas prices have finally brought the energy price cap down below £2,000. However, this is still over 50 per cent higher than families were used to before Russia invaded Ukraine, while the end of the £400 universal payments and rising standing charges mean that over one-in-three families across England will face higher bills this winter than last.
With almost three million households set to see their bills rise by over £100 – at a time when inflation is still sky high – the government must up its game in providing longer-term support for hard-pressed families with a new social tariff for energy bills.
And here are the main points of the Competition and Markets Authority’s study on housebuilders:
Estate management charges – concerns that private housing estates can have high or uncapped charges for owners for basic amenities such as roads and street lighting.
Land banks – the practice of buying large amounts of land to keep for years before building has led to “concerns from some stakeholders this may be limiting competition or slowing build-out rates in some areas”.
Planning rules – overly complex planning rules are hindering development.
Regional competition – whether there is enough competition in various parts of the UK.
Barriers to new builders – including access to land to build on.
That adds up to quite a sweeping study – and one which will be scrutinised particularly closely by big housebuilders with significant land banks.
The findings are due in the autumn.
UK competition regulator to probe British housing sector
It is a busy morning for the UK’s business regulators: the Competition and Markets Authority (CMA) has announced not one but two studies on British housing.
The regulator has said it will look into concerns that housebuilders’ strategy of buying and holding of land may be anti-competitive, and concerns over the unfair treatment of tenants in the private rented sector.
There is a fairly long list of places the regulator is looking – and it has not made any findings yet. Nevertheless, the studies will make many in the housing industry hot under the collar.
Here are the main points for the rental sector:
Zero deposit schemes – concerns over pressure selling and undisclosed commissions by lettings agents.
Sham licences – some landlords are not recognising consumers’ rights under tenancies.
Onerous guarantee clauses – forcing tenants to come up with extensive evidence of assets.
Possible unlawful discrimination – including banning housing benefit claimants – the infamous “no-DSS” clause.
Fees charged on retirement housing.
Updated
Here is some of the political reaction to the new energy price cap:
Labour shadow energy secretary Ed Miliband says high energy prices in Great Britain – which are still far above the £1,277 price cap set in October 2021 – can be blamed on UK government energy policy:
These figures demonstrate the scandalous Tory cost of living crisis is still raging for millions of people. 13 years of failed Tory energy policy has left Britain as the most exposed economy in Western Europe to the effects of Putin’s war. https://t.co/PpcrWHo8rt
— Ed Miliband (@Ed_Miliband) August 25, 2023
Grant Shapps, the government’s energy security secretary, said:
It’s encouraging families will see their energy bills continue to fall from October, down £580 on average since their peak – another milestone as we deliver on our promise to halve inflation.
We acted swiftly when prices soared because of Putin’s abhorrent attack on Ukraine, spending billions and covering around half a typical household’s bill.
And we are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes.
Brearley has defended rises in standing charges, which pay for energy infrastructure, but which are charged even if a household uses no energy.
He said:
If we take money off that fixed charge and we put it into the price per unit, then poor households that have high energy needs are made a lot worse off.
It was a marginal change for most customers, but some people with high energy needs, such as families with disabled children, would be worse hit, Brearley said.
Asked about social tariffs, which would charge less to poorer households, Brearley said:
We support that being in the mix of the options we might examine.
Ultimately that is a decision for government. I have to accept as a regulator, I don’t have to think about the fiscal position. I don’t have to think about all the pressures on families.
'Many families are going to struggle' - energy regulator
Brearley said many families are going to struggle. He said:
That is way higher than the price before the crisis. Many many families are going to struggle.
He said there are alternative options to the price cap, such as regulating differently for different companies.
Updated
Jonathan Brearley has told BBC radio’s Today programme the price cap drop is a “welcome relief for households”, and “an actual drop in the cost of energy”.
He said:
I would love to come on this show and tell you prices are going to fall, but the truth is markets are still tight.
The situation is much more stable this year. We have a lot more gas available.
But the market is still tight.
Things are going to be volatile for some time to come.
Ofgem says the price cap is the lowest level since October 2021.
Ofgem says:
[It] reflects further falls in wholesale energy prices, as the market stabilises and suppliers return to a healthier financial position after four years of loss making.
Jonathan Brearley, Ofgem’s chief executive, said:
It is welcome news that the price cap continues to fall, however, we know people are struggling with the wider cost of living challenges and I can’t offer any certainty that things will ease this winter.
That’s why we’ve introduced new measures to support consumers including reducing costs for those on pre-payment meters, and introducing a PPM code of conduct that all suppliers need to meet before they restart installation of any mandatory PPMs.
There are signs that the financial outlook for suppliers is stabilising and reasonable profits are returning. With the small additional allowance we’ve made to Earnings Before Interest and Tax (EBIT), this means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter. This code will ensure there are clear expectations of supplier behaviours especially for their most vulnerable consumers with whom suppliers should be reaching out proactively, with compassion and understanding. There are great examples of suppliers already doing this but I want to see this become the norm in such an essential sector that has such a big impact on people’s lives.
Here’s Ofgem’s announcement (delivered to the stock market this morning):
The change will bring the average dual-fuel energy bill below £2,000 a year for the first time since April 2022, saving households an average of £151 on the previous quarter.
From 1 October - 31 December, the cap will be set at an annual level of £1,923 for a dual fuel household paying by direct debit based on the current typical domestic consumption values (TDCV) rate.
Energy price cap to fall to £1,923, says Ofgem
The energy price cap for households in Great Britain is to fall to £1,923 a year for the usage of a typical household, according to energy regulator Ofgem.
The new average figure will apply from October to December. It is expected to rise again for January.
The cap, which does not apply to Northern Ireland, was set at £2,074 for July to September.
Ofgem to announce energy price cap for Great British households
UK energy regulator Ofgem is expected to cut the price cap for households in Great Britain, in an announcement due at 7am BST.
The cap, which limits what suppliers can charge per unit of gas and electricity, fell on 1 July to the equivalent of £2,074 a year for the usage of a typical household. The cap does not apply to Northern Ireland.
Analysts at Cornwall Insight have forecast the cap will fall to an average of £1,823 a year from October.
The Resolution Foundation shows in this graph how the maximum household energy price has moved during the energy crisis. Note the energy price guarantee, which took over from the price cap temporarily as prices surged last winter.
Britain’s energy bill crisis is not over... 🧵
— Resolution Foundation (@resfoundation) August 24, 2023
Tomorrow the energy regulator @Ofgem is expected to announce that the energy price cap will fall to ~£1,925 per year, from October to December.
Full analysis here from @FryEmily and @JMarshall_3 ⤵️ https://t.co/3dhUfINRmY pic.twitter.com/dsJW6Xk43b
However, bills could rise again from January, depending on wholesale prices charged to UK suppliers. European gas prices rose significantly in recent weeks because of planned strikes at an Australian gas facility. The company and the workers agreed a deal on Thursday, prompting European gas prices to drop back.
Cornwall Insight predicted the cap could rise to an average of £1,979 in January.
The agenda
7am BST: Ofgem energy price cap announcement
9am BST: Germany Ifo business climate index (August; previous: 87.3 points; consensus: 86.7)
3:05pm BST: Federal Reserve chair Jerome Powell speech at Jackson Hole
