The average domestic energy bill is set to fall by one percent in January in a glimmer of good news for households, according to experts.
Energy consultancy Cornwall Insight said it expects the typical household’s energy bill to drop to an annual £1,697 a year from January 1 from the £1,717 cap that takes effect from October 1.
Prices are also forecast to fall slightly in both the second and third quarters of next year.
The drop, however slight, will be welcome news for households in England, Scotland and Wales who this week will see the average bill rise by around £12 a month or £149 a year from the current £1,568 for a typical dual fuel household in England, Scotland and Wales.
Cornwall Insight’s previous forecasts since August showed a slight quarter-on-quarter rise in January.
But on Monday it said a combination of the EU meeting its gas storage targets ahead of winter, strong global LNG supply outlooks, and improved confidence regarding gas and electricity imports ahead of winter had resulted in wholesale market prices falling.
However, bills still remain hundreds of pounds above pre-energy crisis levels, with little to suggest a return to historic averages is on the horizon.
Craig Lowrey, principal consultant at Cornwall Insight, said: “While households will have to endure a rise in the cap from October, our current forecasts suggest that this is a temporary blip.
“January to March, typically some of the coldest months of the year, often bring with them the biggest energy bills and, while our latest forecast is welcome news, it remains subject to the volatile wholesale gas and electricity markets.
“There remains a further six weeks or so for the wholesale market to influence our forecasts, and while the negligible quarter-on-quarter drop is welcome, it must be remembered that bills will still remain hundreds of pounds above historic levels.”
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