Ed Miliband has urged energy watchdog Ofgem to crack down on soaring costs as forecasts show the typical energy bill could soon rise by over £100 a year.
Whitehall sources have indicated that they expect bills in most UK regions to increase by around £9 a month over next three months, according the The Guardian, hitting Labour’s pledge to curb the cost of living.
Forecasts of exactly how much rates will rise again in April vary, but most key analysts agree they will be increasing. Large energy firms such as British Gas, E.On and EDF predict the price cap will increase by between five and seven per cent.
Experts say increased volatility in the global gas market is a key source of the rises. The transit deal that allowed gas to flow to Europe from Russia via Ukraine recently ended, adding more uncertainty.
Meanwhile, the lack of gas storage in Britain and Europe is also adding to the issue at a time when cold weather has greatly increased demand in recent months.
Mr Miliband, the energy secretary, has now written an urgent letter to Ofgem, asking the regulator to move faster to protect consumers against coming price rises. Writing to chief executive Jonathan Brearley, he said there are steps Ofgem could take to combat the “rollercoaster” of global gas markets.
“In recent months we have seen once again the dangers for our country of being exposed to fossil fuel markets controlled by petrostates and dictators,” he wrote, adding that the UK is “highly exposed to these global gas markets.”
“Once again, the British people and British businesses will face the consequences of fossil fuel markets we do not control,” he said.
The former Labour leader added that Ofgem should crack down on inaccurate and large bills and bring forward proposals to introduce a zero standing charge for consumers.
The energy regulator will announce its energy price cap for April to March on 25 February. Treasury sources have indicated that the new annual cap will be £1,846, up £108 (6.2 per cent) from the current level. This would put it up £156 from the same time last year, and to the highest it has been since January 2024.
The energy price cap is the maximum amount energy suppliers can charge for each unit of energy for those on a standard variable tariff. That includes most households. It is expressed as an annual bill for an average home.
The figure rose from £1,717 to £1,738 for January to March an increase of 1.2 per cent. The rise was the second consecutive increase, with a massive 10 per cent spike in October, meaning April will bring the third rise in a row.
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