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Tuesday, May 24, 2022

Cost of living crisis gets worse

The Guardian reports that Ofgem is on course to raise the cap on household energy bills to about £2,800 in October.

The paper says that the increase in the cap would push up the average annual bill by more than £800, after the regulator increased it by £693 in April to £1,971. The regulator’s chief executive, Jonathan Brearley, told parliament’s business, energy and industrial strategy committee the figure was provisional but was based on the most accurate current estimate:

He said he would be writing to the chancellor, Rishi Sunak, on Tuesday afternoon to confirm the soaring cost of wholesale gas, which has risen by as much as 10 times the normal price in recent months, and a rise in electricity costs, were to blame for a 40% increase in the average bill.

Brearley said: “The price changes we have seen in the gas market are genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s.”

Energy prices pushed the consumer prices index (CPI) to 9% in April, fuelling criticism that the government has failed to protect millions of low-income families from making the choice of feeding themselves or heating their homes.

The Resolution Foundation thinktank said raising the energy price cap to around £2,800 in October could mean 9.6 million families across England fall into fuel stress this winter, defined as spending at least a 10th of their total budgets on energy bills alone.

“At the moment 5 million families are considered to be in fuel stress, while across the poorest 30% of the population, up to three-quarters of families could fall into fuel stress,” the thinktank said.

It just gets worse and worse.
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