Household energy bills are forecast to rise by 4% in October, with the typical annual bill expected to reach £1,729, according to Cornwall Insight.
The organisation say that the increase reflects higher wholesale prices, driven by uncertainty surrounding the US-Iran conflict and concerns over European gas storage levels ahead of winter.
Wholesale markets have also been pushed higher by Europe’s heatwave which is increasing gas demand for power generation and extending offshore production outages in Norway.
The anticipated rise has been criticised by the End Fuel Poverty Coalition who have called for the government to make further reductions in the cost of electricity.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “We’re now seeing energy consumption decline. Some reduction could be seen as a good thing, caused by better energy efficiency in people’s homes.
“But sadly, for many households, reductions in energy use have happened simply because people cannot afford to use as much energy as in the past.”
The price hikes come despite the government’s planned removal of VAT from household electricity bills in October, with increases expected to outweigh the savings.
Cornwall Insight also expects prices to rise further in January, although volatility makes the forecast uncertain.
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