Energy regulator Ofgem today announced that the UK’s energy price cap has fallen to £2,074 a year, with around 27 million households expecting a modest drop in their energy bills this summer.

From July, when the change takes effect, households will see their average gas and electricity bill fall by around £426, down from the £2,500 a year level set by the government’s energy price guarantee. However, the average energy bill will remain almost double the levels seen in October 2021, where the typical household paid £1,271 a year for gas and electricity.

While this may sound like some welcome relief, the cost of living crisis is still deepening in other areas. Earlier this year, a study found that less than a quarter of pay rises in the UK matched inflation, and private rents in London jumped by around 20% in the past year alone.

The Energy and Climate Intelligence Unit, a government advisory body, also said it was unlikely bills would fall much further than their current level amid soaring demand for gas, with The Telegraph reporting that energy bills will remain above £1,700 until 2030, even with the price cap cut. 

Rishi Sunak, the prime minister, called the cut “welcome news”, despite the fact that households who struggled to pay their bills over the winter will also feel little relief, as government grants worth £400 between October to March have now come to an end. “It marks a major milestone in our work to halve inflation,” he continued.

However, the End Fuel Poverty Coalition warned that “the sting in the tail to this announcement is that customers are still going to be paying roughly the same for their energy as last winter.

“And after months of inflation and the wider cost of living crisis, people are even less able to afford these high energy bills,” the coalition shared in a statement on its website.

“The government needs to use the summer to fix Britain’s broken energy system, because for millions of people the energy bills crisis is far from over. This means ramping up energy efficiency programmes, helping the public with energy debt and reforming energy pricing arrangements so people don’t suffer again this winter.”

Images: Getty