Britain poised for 5% energy price-cap rise in April, Cornwall Insight says

Britain poised for 5% energy price-cap rise in April, Cornwall Insight

By Susanna Twidale

LONDON (Reuters) - Britain's domestic energy price cap is expected to rise almost 5% in April, analysts at Cornwall Insight said on Tuesday, with cold weather and low gas storage levels in Europe keeping wholesale prices high.

The rise, which would be the third consecutive quarterly increase, would be a blow for the government which has made reducing energy bills one of its aims.

“The market is more volatile than it has been in quite some time, and households are bearing the brunt of cold weather and low gas storage levels across Europe,” Craig Lowrey, principal consultant at Cornwall Insight, said.

Britain's Energy Minister Ed Miliband on Tuesday wrote a letter to regulator Ofgem, published also on X, urging it to help support households in debt and to make sure people receive compensation quickly for wrongly installed pre-payment meters.

In response, Ofgem said energy bill changes were driven by the country’s reliance on a global gas market and said it was introducing tougher customer service standards and working to launch new tariffs within the price cap to give consumers more choice.

“The only way to move away from this volatility is to build a homegrown, clean and secure system that homes and businesses can rely on,” Ofgem said in an emailed statement.

Benchmark British gas prices hit a two-year high earlier in February as cold temperatures led to high withdraws from Britain and Europe’s gas stores and after a deal to supply Russia gas via Ukraine expired at the end of the year.

Cornwall Insight forecast the price cap will rise in April to 1,823 pounds ($2,294.79) a year based on average use, up from 1,738 pounds a year in January.

Ofgem will publish the price cap level for April on February 25.

($1 = 0.7944 pounds)

(Reporting By Susanna Twidale; Editing by Bernadette Baum)