6th Aug 2021 08:32
(Alliance News) - Millions in the UK will face higher energy costs from October, as the industry regulator hiked the price cap.
Ofgem said gas prices have jumped to a record high over the past six months as lockdown measures across the globe ease.
The watchdog said the energy price caps, used for 15 million customers in the UK, will be hiked as a result from October 1. Those on default tariffs will see their bills rise by GBP139 to GBP1,277 per year. Those using prepayment meters will see costs rise to by GBP153 to GBP1,309.
"This increase is driven by a rise of over 50% in energy costs over the last six months with gas prices hitting a record high as the world emerges from lockdown," Ofgem explained.
"Surging global fossil fuel prices are already driving up inflation for consumers, making fixed rate energy tariffs not covered by the price cap, as well as petrol and diesel more expensive."
Some of the UK's most well-known energy providers are affected, including SSE PLC, British Gas - owned by Centrica PLC - and E.ON SE. Also included in the traditional big six energy suppliers is ScottishPower, owned by Iberdrola SA.
Ofgem adjusts the price cap twice a year to reflect the costs of supplying energy. Last winter, the cap was lowered by GBP84 due to lockdown measures.
The price cap hike comes amid inflationary fears gathering pace in recent weeks and months. On Wednesday, the Bank of England warned inflation is set to surge above its target in the coming months.
The BoE cautioned inflation could rise to 4% in the fourth quarter of this year, though insisted current price pressures "will prove transitory". The BoE targets a medium-term inflation rate of 2%, and believes CPI will fall back to this level in late 2023.
By Eric Cunha; [email protected]
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