The prediction by consultancy Cornwall Insight indicates that domestic energy prices in the UK are likely to decline by 16% in April, offering a much-needed respite to billpayers who have been grappling with soaring household expenses. The anticipated reduction, estimated to be the equivalent of more than £300 a year, is attributed to a drop in wholesale gas prices. According to analysts, the annual household energy bill for a typical usage is anticipated to decrease from £1,928 to £1,620, with the possibility of experiencing further declines in the summer months.
The positive outlook is linked to the stability of the wholesale market, buoyed by healthy energy stocks and favorable supply prospects. Craig Lowrey, principal consultant at Cornwall Insight, highlighted that the industry could witness the lowest energy costs since the Russian invasion of Ukraine if current market conditions persist. However, it is important to note that this forecast is contingent on the decision of the regulator, Ofgem, who will set the price cap for the second quarter in the coming month.
The prospective reduction in household energy bills comes as a welcome development for consumers who have faced two years of high prices. While this decrease offers some relief, analysts caution that bills would still remain higher than the pre-crisis norm. Nevertheless, the projected downturn in energy prices presents a glimmer of hope for households amid the ongoing economic challenges.
It is worth noting that Cornwall Insight’s forecast is subject to the dynamics of the energy market and Ofgem’s decision-making process. As such, it is essential for consumers to stay apprised of developments related to energy pricing and regulatory decisions in order to manage their budget effectively.
