Energy bills to soar for millions as price cap hiked to £3,549
The Ofgem regulator acknowledges the record increase will be "devastating" for hard-pressed consumers across Britain and calls for "urgent and decisive action" from the incoming prime minister.
Millions of households will see their energy bills rocket as the price cap is hiked to £3,549 a year, plunging many into financial hardship.
The record 80% October increase, announced by the regulator Ofgem, will see a typical default tariff customer paying an extra £1,578, laying bare the deepening cost of living crisis.
Meanwhile, 4.5 million pre-payment meter customers, who are often the most vulnerable and already in fuel poverty, will see an even more punishing increase, with their average annual bill set to go up to £3,608.
In all, around 24 million households will be hit by the price spike.
Soaring wholesale gas costs - fuelled by Russia's invasion of Ukraine - have driven the energy price cap increase, which is widely expected to spiral even further next year, with average bills forecast to hit £5,386 in January and £6,616 in April, according to analysts Cornwall Insight.
It ramps up the squeeze on households already wrestling with soaring food and fuel prices.
Sky News has found a third of households are already struggling to pay their energy bills, while Philippe Commaret, managing director of energy giant EDF, says half of UK households could be in fuel poverty in January.
The price cap, designed to stop people being ripped off by their supplier, sets the maximum households pay per unit of energy used with the increase based on "typical" usage - customers who use more pay more.
Chancellor Nadhim Zahawi has admitted that the soaring energy costs will cause "stress and anxiety for many people" - but added that "help is coming" from the government.
Ofgem chief executive Jonathan Brearley told Sky News: "I talk to customers all the time and I know for many, many people this will be devastating news.
"After COVID last year, we saw lots of economies grow, particularly Asia, and that already put pressure on the gas market. And as we saw, prices begin to spike in around September of last year.
"Now, this year over and above that, we have seen a slow and deliberate cut off of gas by Russia to the European market. And that has made prices spike much, much further.
"When I look at the prices for winter now for buying the gas, they are 15 times what they normally are. If that were to happen in petrol, that would mean it would cost £400 to £500 to fill our car.
"So ultimately, the cost of energy is changing dramatically. And that's why the price cap needs to change. And that's why we are announcing the incredibly difficult news that it's going up to £3,549."
news.sky.com
