Household energy price cap forecast to drop 14% in April 2024

Cornwall Insight are predicting that the April 2024 default tariff price cap will go down by a 14% in April 2024, projecting an annual cost of £1,660 for a typical dual fuel consumer, reflecting a £268 reduction on the previous price.

This downward trend is anticipated to continue, reaching £1,590 in July 2024 before a slight increase to £1,640 in October.

While business customers have been benefitting from the reduction in the wholesale price of energy since the middle of November, households energy prices are much slower to react under the current price cap governance as levels are only adjusted every quarter and are in arrears.

So it takes at least 3 months for households to see the changes. Not great in a falling market but a welcome respite in a rising market.

Despite initial concerns, events such as the Israel-Hamas conflict and potential LNG production strikes in Australia have not significantly impacted energy supplies.

This together with the absence of major pipeline disruptions and a milder winter have kept European gas-in-store levels above expectations, contributing to the decrease in wholesale prices.

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