Prior to the introduction of the April-June 2023 Default Tariff Cap (price cap), Cornwall Insight are releasing our latest predictions for the third and fourth quarters of 2023. Our forecasts place Q3 (Jul – Sept) at £2,024 and Q4 (Oct-Dec) at £2,076 for a typical household.
The government’s decision to maintain the Energy Price Guarantee (EPG) at an average of £2,500 for the next three months will mean households are not directly impacted by the £3,280 cap being introduced tomorrow. However, from July onward, it's expected that the cap will drop below the EPG, which will result in household bills reverting to the price cap level.
While our forecasts for the second half of 2023 will mean a large reduction in bills from the historic highs seen over the past year, they are still significantly above the rates paid by typical domestic consumers prior to 2021.
Figure 1: Cornwall Insight’s Default tariff cap forecasts
Figure 2: Default Tariff Price cap forecasts, Per Unit Cost and Standing Charge including VAT (dual fuel, direct debit customer, national average figures)
Dr Craig Lowrey, Principal Consultant, Cornwall Insight:
“The energy market has been on a difficult journey over the past three years, with consumers having faced energy bills at levels never experienced before. Our forecasts for the second half of 2023 show the prospect of a more stable energy climate, which all being equal, will see energy bills continue their downward trajectory. However, in the short-term they still remain well above historic highs.
“Of course, we must never take anything for granted, and as quickly as they fall, global shocks and our reliance on energy imports, could see the energy market, and subsequently bills, rise yet again. These predictions should not be taken as a signal that the problems in the energy market have been resolved, but instead used as motivation to implement an energy system which will stop us from ever again seeing the market highs that caused – and continue to cause - so much hardship. By focusing on establishing a sustainable renewables-based energy system, we can become resilient to external interference, sure up UK energy supply and deliver affordable bills for households."
