LONDON, March 31 (Reuters) - Britain's domestic energy price cap is forecast to rise by about 18% in July, analysts at Cornwall Insight said on Tuesday, lowering their forecast slightly as wholesale
Britain's Energy Price Cap Projected to Increase by 18% This July
Overview of the Projected Energy Price Cap Increase
LONDON, March 31 (Reuters) - Britain's domestic energy price cap is forecast to rise by about 18% in July, analysts at Cornwall Insight said on Tuesday, lowering their forecast slightly as wholesale energy markets steadied.
Government Response and Constraints
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Potential Actions by Finance Minister
Finance minister Rachel Reeves has said she would consider action to shield households from surging energy costs but is constrained by the country's high borrowing costs.
Factors Influencing the Price Cap
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International Market Disruptions
Middle East Shipping and LNG Exports
Disruptions to shipping in the Middle East and a halt to liquefied natural gas exports from Qatar, one of the world's largest gas exporters, have led to a surge in international gas prices.
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Wholesale Energy Prices and Ofgem's Formula
Price Cap Calculation and Contributing Factors
Wholesale energy prices are the largest single factor contributing to British energy regulator Ofgem's domestic price cap, which is set on a quarterly basis using a formula that also reflects suppliers' network costs and environmental and social levies.
Forecast Details and Timeline
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Updated Forecast Figures
Cornwall Insight forecasts Ofgem's price cap will rise in July to 1,929 pounds ($2,549.17) a year for typical use, up 288 pounds from 1,641 pounds in April.
The analysts had previously forecast a 20% rise in July.
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Upcoming Ofgem Announcement
Ofgem is expected to publish the next price cap level by May 27.
($1 = 0.7567 pounds)
(Reporting By Susanna Twidale; Editing by Arun Koyyur)
