UK Energy Bills to Fall in October After a Summer Price Cut

Starting October 1, UK households will see a modest drop in their energy bills, following a summer reduction. With the Ofgem price cap set to fall by 1%, the average dual-fuel customer will save an additional £23, totalling £152 annually.

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UK energy prices drop. credit : shutterstock | en.Econostrum.info - United Kingdom

Energy bills across the UK are projected to drop again in October, providing some relief for households still grappling with high costs in the wake of the energy crisis. According to Cornwall Insight, the Ofgem price cap will decrease by 1% from October 1, following a reduction of 7% that took effect earlier in July.

This decrease, though modest, will mean an extra £23 saving on top of the £129 reduction that was implemented this month, bringing the total annual savings to £152. This will bring the typical annual bill for a dual-fuel customer down to £1,698 – the lowest since the onset of the energy crisis triggered by Russia’s invasion of Ukraine.

Why the Fall in Prices Matters for UK Households

Despite the drop in prices, energy bills remain substantially higher than pre-crisis levels, which were around £1,100 per year. The current price cap remains a heavy burden on many UK families, despite recent decreases in wholesale electricity prices.

Experts caution that although a reduction in the price cap is welcomed, it may not signal the end of high bills. 

Dr. Craig Lowrey, Principal Consultant at Cornwall Insight, explains that fluctuations in the price cap should not obscure the bigger picture: “Households are still paying far more for their energy than they were before the pandemic.” With global energy markets continuing to be volatile, households must prepare for further uncertainties in the near future.

Cornwall Insight’s forecast suggests that, while the October drop is a positive shift, the price cap remains £600 higher than pre-crisis prices when inflation is accounted for. 

This means that even with these reductions, UK consumers are still facing ongoing financial strain. Additionally, geopolitical tensions, particularly in the Middle East, could result in further price volatility, as witnessed earlier this year.

Fixed Deals Offer an Alternative to the Price Cap

In the meantime, households are urged to act quickly if they want to secure more affordable energy deals. According to energy experts at Uswitch, several fixed-rate plans are already cheaper than the projected October cap. For example, Outfox the Market’s two-year fixed deal, priced at £1,575 per year, is £145 cheaper than the current price cap of £1,720.

While it is tempting to wait for price drops to take effect, experts recommend switching to a fixed deal now to lock in lower rates before the price cap changes further. The current window of opportunity, with fixed deals available at better rates, may be a practical option for many households looking to manage their electricity costs before the colder months arrive.

In light of this ongoing volatility, Cornwall Insight continues to advocate for a long-term strategy focused on boosting the UK’s renewable power infrastructure.

Dr. Lowrey emphasized that transitioning to homegrown renewable power is the key to securing a more self-sufficient and stable energy system, which could shield consumers from future international energy price shocks.

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