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Energy price cap will rise by 1.2% from January: "Another turn of the screw for households already grappling with high costs"

ended 22. November 2024

Energy regulator Ofgem has today announced a 1.2% increase of the energy price cap for the period covering January-March 2025. The change to the price cap – which sets a maximum rate per unit and standing charge that can be billed to customers for their energy use – will rise by £21 for an average household per year or around £1.75 a month. Newspage askext experts for their views, below.

4 responses from the Newspage community

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Ben PerksVerified
Managing Director at Orchard Financial Advisers
The battle between households and their bills rages on. Disposable income is fast becoming a thing of the past. Families are cash strapped and another uncontrollable increase will leave many with their head in their hands wondering, “when are we going to catch a break?" Something needs to change and urgent action is needed from this Government to get control of the economy and put more money in people’s pockets.
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Ranald MitchellVerified
Director at bad credit mortgage specialists Charwin Mortgages
Even a small rise like this is another turn of the screw for households already grappling with high costs. It’s a stark reminder that energy affordability remains a critical issue, and we need urgent progress on long-term solutions like renewable energy to shield families from this relentless financial strain. The pressure on people's finances is growing all the time.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
The rise in the energy price cap is another financial strain for households across the country. It comes as mortgage rates and rents also rise. Only a month ago many of us believed that things were going to get better, but now they look set to get worse. When will the government understand that higher bills means less discretionary spending, which in turn hits the economy’s growth prospects? The question remains, why are our energy costs substantially greater than those of many other countries?
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John ChoongVerified
Head of Equities and Markets at Interpretiv
The latest EPC increase spotlights a critical economic dynamic — the powerful yet often overlooked relationship between energy and food prices. Energy costs cascade through the entire food production chain, creating an inflationary feedback loop reminiscent of 2022. Our research shows these interlinked components influence at least 38% of the CPI basket, presenting a major challenge to the disinflation narrative required for further rate cuts. As such, markets will now reassess their 2025 rate cut expectations as elevated energy costs may impact food inflation. Thus, the concerning aspect is how this energy-food nexus will end up shaping both inflation expectations and wage demands, potentially undermining progress on services inflation. On that basis, we now expect headline inflation to remain around 2.5% in Q1, with the Bank of England likely delaying rate cuts until March or May, particularly if higher energy prices continue to permeate other sectors.