Pressure mounts to tackle new energy price shock – Daily Business

Andy Burnham is facing growing pressure to tackle soaring energy prices as a new report says household bills will rocket in January.

A typical annual bill is forecast to jump by £276, or16%, representing the biggest rise in bills for four years, according to newly-released data.

The forecast from consultancy Cornwall Insight comes ahead of tomorrow’s hike under regulator Ofgem’s October price cap that will see prices rise by 4%, the equivalent of about £60 per year – or £5 per month.

Cornwall Insight said its latest forecast suggests the typical annual bill would rise to £1,999.

The head of EDF Simone Rossi has warned that the UK is “walking into a second energy crisis” and called for an extension to the temporary VAT cut on electricity which also takes effect from tomorrow.

The Prime Minister has admitted the situation is “very difficult indeed” and that ministers are looking at other measures that can be applied to take the pressure off consumers.

Commenting on its latest forecast, Craig Lowrey, principal consultant at Cornwall Insight, said: “These prices are going to hit households hard. January is already a difficult month for many, with cold weather and bank balances still recovering from Christmas.”

The predicted rise is the result of disruption of gas supplies owing to the conflict in the Middle East, and the resulting low gas storage levels in Europe. Rebuilding those stocks could mean high bills “well beyond the winter”, the forecaster said.

Cornwall Insight has a strong track record on forecasts and is widely respected across the industry and politics. Similar forecasts have been made by energy suppliers.

Mr Burnham told his party’s annual conference in London that he has instructed Energy Secretary Miatta Fahnbulleh to accelerate work on disconnecting electricity prices from the wholesale gas market.

The latest warnings come a week after billionaire industriallist Sir Jim Ratcliffe’s industrial giant Ineos is pausing production at its three plants in Hull, blaming high UK gas prices.

He said gas prices in the UK are twelve times higher than in the US, and eight times more expensive than the coal-based processes used by Chinese competitors.