The Gas and Electricity Markets Board said on Thursday it would lower the price cap – the maximum gas suppliers can charge households per unit of energy – to 2,074 Egyptian pounds ($2,567 ) per year from July 1st.
This drop brings some relief to the millions of people and businesses who have struggled to cope with soaring electricity and gas bills over the past 18 months, following rising electricity prices. energy following the Russian-Ukrainian war.
But many low-income people continue to suffer from a cost of living crisis, with food prices rising at the fastest rate in decades.
Since October, people have been partially protected against rising gas prices by the UK Government’s Energy Price Guarantee, which subsidizes a typical household bill by £2,500 a year.
Thursday’s announcement means the average customer will pay £426 less a year, a drop of around 17%.
This decision is a relief to many, even though energy bills are still almost double what they were in 2020.
The recovery from the COVID-19 pandemic and then the Russian-Ukrainian war drove up energy prices around the world.
Prices have fallen since last summer as Europe experienced a mild winter and natural gas supplies outside Russia were secured, while the global economic slowdown put pressure on demand.
“Although the price cap has fallen from its winter peak, it is still well above the pre-2021 average, and many people will still struggle to pay such high bills,” the UK regulator said. ‘energy.
He said the government and the energy sector must work together to support the most vulnerable people this winter.
Data from Britain’s National Statistics Agency showed on Wednesday that inflation fell to 8.7% in April on an annual basis, from 10.1% in March, the first time it fell below 10% since August. But the decline was not as large as expected and food inflation was close to record highs.
Official figures show food prices have risen by 19.1% compared to last year, with a sharp rise in the prices of basic foodstuffs such as milk and eggs.
“We’re on the right track, but there’s no room for complacency,” Chancellor of the Exchequer Jeremy Hunt said on Wednesday. “It’s tough now, but things will get better.”
Despite the significant drop in the consumer price index, the core inflation rate – which excludes volatility in food and energy prices – unexpectedly rose in April to 6.8 %, the highest rate since 1992, and it had reached 6.2% last March, which raises concerns. Some fear that inflation will still need time and monetary tightening to fall back below the BoE’s 2% target.
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