The cost of living crisis is seeing energy prices soar to new highs, with further hikes predicted in 2023.
Households across the UK are being left to struggle, with an estimated 50% expected to experience fuel poverty this winter.
Here’s everything you need to know about when the energy price cap announcement for 2023 will be made.
When is the next energy price cap announcement?
Ofgem will announce the next energy price cap rise on 24 November 2022.
It will come into effect on 1 January 2023.
The energy price cap used to be announced every six months, but it is now adjusted quarterly.
How high will electricity and gas bills rise in January 2023?
Ofgem has not given a prediction on how high the energy price cap could rise in January 2023 due to the “volatile” market.
However, consultancy firm Cornwall Insight has predicted the price cap will reach £5,386 in January 2023, soaring to £6,616 in April.
Their previous prediction for October’s hike was only £5 off at £3,553.
They expect that prices will start to drop from August 2023 to £5,891, before dropping a few pounds further to £5,887 in October 2023.
Ofgem’s CEO Jonathan Brearley has warned that prices will get worse throughout 2023 and has called on the incoming Prime Minister to urgently look into the “continued surging energy prices”.
He added: “We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.”
How often does the energy price cap change?
The energy price cap was introduced in 2019 and was originally changed every six months.
However, Ofgem have changed these adjustments to now happen every quarter, which means that consumers will receive a new price cap four times a year.
The most recent price cap announcement made on 26 August will come into effect in October 2022.
The price cap will again be adjusted in April, July and October 2023.
Ofgem have cited their reason for changing the cap to ensure it “does its job”.
Speaking after the change was announced, Jonathan Brearley, the CEO of Ofgem, said: “The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now.
“Today’s changes ensure the price cap does its job, making sure customers are only paying the real cost of their energy, but also, that it can adapt to the current volatile market.”
Why are energy prices rising?
There are a variety of reasons that energy prices are soaring in the UK.
The cost of living crisis has seen inflation rise to its highest rate in 40 years at 10.%, whilst the economy has officially entered recession.
Combined with the effects from the Covid-19 pandemic and the war in Ukraine, it has created the perfect storm for spiralling costs.
Speaking about the 80% price increase announced for October, Chancellor Nadhim Zahawi blamed the rising costs on Putin.
Zahawi said: “I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support. This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”