Ofgem has confirmed that UK households will pay "considerably" less for their energy bills from July. Martin Lewis spoke with a director from the energy regulator on ITV's Good Morning Britain last Wednesday (May 17).
It comes as Ofgem is set to confirm the new Price Cap rate today (May 24). The rate, which will be introduced on July 1, is set to fall below the Government's current Energy Price Guarantee.
Speaking on Good Morning Britain, Martin said: "I'm predicting a drop of 17.5 per cent when the price cap comes out in July. Am I about right?"
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Neil Kenward, Ofgem's director for strategy and decarbonisation, replied: "So we're not going to give figures on our price cap forecast." Martin then said: "Blink once for yes, twice for no."
Mr Kenward continued: "We publish the price cap number next week." Martin replied: "Next Thursday."
Mr Kenward went on: "That's right. It's obviously sensitive until then, we haven't actually finalised the number. But I can be clear that the number will be down considerably on the £2,500 limit that applies at the moment for that average annual bill."
Martin added: "So the price cap will be dropping for the three months from July. I think it will be around somewhere between a 15 per cent to 20 per cent drop on a typical bill."
Martin Lewis said on his Money Saving Expert website: "The assessment period for the July price cap ended yesterday. Cornwall Insight’s final prediction is a drop of 18 per cent (so every £100 cost now will be £82 from July) compared to the rates people pay today under the Energy Price Guarantee.
"I can't see it being more than a couple of percent out compared to Thursday’s announcement. The regulator has already confirmed to me that prices will drop in July, so we know that or the first time since last September people the government will no longer be subsidising energy prices.
"The further out you go the more difficult things are to predict, it’s a bit of crystal ball gazing. Cornwall’s forecast continues to show prices dropping again in October, before rising slightly in January.
"If the predictions do turn out to be true, it does mean rates for the winter coming will be lower than for the winter gone. However when you factor in there's no longer the £66/mth winter support, it means lower users will still in practice pay more than last winter, higher users less.
"And of course prices are far in excess of what they were before the 'energy crisis' for many people over double."
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