energy bill price cap
(Image credit: Getty)

Families are already feeling the strain of rising living costs, with the Ofgem chief predicting that the energy bill price cap (opens in new tab) will rise to £2,800 this autumn. 

Energy costs are at an all-time high, and the recent increase in National Insurance (opens in new tab) is putting even more strain on household budgets. The escalating expenses don't appear to be slowing down, as Jonathan Brearley told the Commons Business Committee that due to the volatile gas market in October, the price cap will increase by about £1,000.

The announcement comes as Chancellor Rishi Sunak considered charging a windfall tax (opens in new tab) on energy providers and oil and gas companies in an effort to support struggling households.

Gas prices (opens in new tab) have already increased by approximately fourfold since 2020. Due to a variety of global factors, including increased demand during the lockdown and export difficulties.

Boris Johnson warned last week that he can't "magic away" all the rising food and energy costs as he faced mounting pressure to address the crisis. "We need the government to step in... broadly, this is only something the government can address," Mr Brearley told MPs.

Mr. Brearley noted that families are in for more daunting news, adding, "I do need to be clear with this committee, with customers and with the government about the likely price implications for October. Therefore later today I will be writing to the Chancellor to give him our latest estimates of the price cap uplift."

Credit: Getty Images

Although the exact amount of the increase is unclear, families should expect a price cap of around £2,800 in October.

Until September 31, the current ceiling of £1,971 applies. It was an increase of £693 above the previous cap, which had been in place for six months.

Thousands more Brits are expected to get into debt in October, with at least four out of ten people facing fuel poverty.

According to Samuel Kasumu, a former advisor to the Prime Minister, ethnic minority Brits would be the most hit, with just 30% having a month's worth of money to see them through the crisis.

Even after individuals were smacked with "record" increases in energy bills on April 1, Simone Rossi, chief executive of EDF energy, warned last month that "the worst is yet to come."

Mr Sunak has reportedly directed Treasury staff to work on preparations on possible tax on more than £10 billion in excess profits made by power generators, including windfarm operators.

Despite rising costs, energy companies have been making record profits. The war in Ukraine is driving up global wholesale costs. However, Treasury sources claim that no decision on a windfall tax scheme has yet been taken.

Since December 2020, Kudzai Chibaduki has worked as a trainee journalist at FUTURE, capturing all fashion, entertainment, and beauty content for the Lifestyle websites, as well as contributing to the shopping sections for Goodto.com's widely read online magazine. Kudzai previously worked as a freelance fashion wardrobe stylist, directing magazine photoshoots and coordinating the fashion direction of recording artists.