Money saving expert Martin Lewis says the 80% rise in the energy price cap is "hideous but NOT a surprise". The rise is set to send the the average household's yearly bill from £1,971 to £3,549 from October.
The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again. Read live reaction to the announcement here.
Martin Lewis said: "I've been accused of catastrophising about the energy hikes that have now come true. Yet let me be plain, 'doom-mongering' or not. More help is desperately needed for poorest or people will die this winter due to unaffordability of an 80% SO FAR energy price cap hike."
Read more: Energy price cap: what is it, what support is available?
In a raw and emotional interview, he told the Today programme: "The new price cap that is coming in on the 1st of October is 37% of the new state pension, and an even bigger proportion of someone on Universal Credit. This is a catastrophe, plain and simple unaffordable.
"The boss of Ofgem said, in the polite way a regulator has to, effectively said this is out of our hands, we have no power, we need government intervention. If we do not get further government intervention, on top of what was announced in May, then lives will be lost this winter by too many people to think about, because of these unaffordable, terrible rise in energy bills."
He said that it was "staggering" that despite the warnings of the price cap rise in October from as far back as March, nothing has been done about about dropping the standing charge. "We haven't had a Government in place who could put the separate help in, so Ofgem has had to work within the status quo," he said. "We have been in a fast-changing, catastrophic situation where we all knew this was coming, but we have had to work within the status quo. Why have we got to this announcement stage and no firm help has been announced.
"The mental health to the country of this announcement alone is catastrophic. This is not good government, and this is not good politics. I am shocked they haven't thought about putting something in place to give people peace of mind.
"The only thing I have heard that gives me some hope is that the two Prime Minister candidates both say they understand the need for more help, but we haven't been told in clear detail what that help is. We have people across the country getting in touch with me, the panic, the dismay, the depression. People are asking me how they are going to be able to afford to eat and to be able to feed their children.
"I cannot understand why we have not got a firm announcement to give people some peace of mind about what will come. We must hope that once the Prime Minister is in place they will come up with a firm and robust plan that we can all get behind that feeds and heats people, so we don't have people dying because of these price caps this winter."
Ofgem's chief executive Jonathan Brearley warned of the hardship energy prices will cause this winter and urged the incoming Prime Minister and new cabinet "to provide an additional and urgent response to continued surging energy prices". The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic, and had been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.
After Friday morning's announcement, Chancellor of the Exchequer, Nadhim Zahawi said: "I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
"While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
Wales' First Minister Mark Drakeford has called for an emergency budget and said: "We're doing all we can to support people in Wales, but UK Government's failure to address this crisis will result in further hardship for many families."
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- Energy price cap: what is it, when is the announcement, and what support is available?
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