What's happened
Energy price caps in the UK will increase by 2% from October 1, raising typical household bills. Meanwhile, several Japanese power suppliers are raising rates despite government subsidies. Ofgem plans to introduce tariffs with lower standing charges, but these are unlikely to reduce overall bills. Consumers are advised to submit meter readings and compare deals.
What's behind the headline?
The recent rise in UK energy bills reflects ongoing inflation in network and operational costs, despite wholesale prices falling slightly. Ofgem's proposal to offer tariffs with lower standing charges aims to give consumers more choice but does not guarantee lower bills. The move is a response to campaigners' concerns about the fairness of flat-rate standing charges, which disproportionately impact low-energy users. However, critics like Martin Lewis argue that these measures are limited and may not benefit the most vulnerable, as suppliers could offset lower standing charges with higher unit rates. The Japanese case shows a different approach, with government subsidies temporarily shielding consumers from rate hikes, but underlying costs continue to push prices upward. Overall, these developments highlight the persistent challenge of balancing affordability with the recovery of essential infrastructure costs, and the likelihood that bills will continue to rise in the near term.
What the papers say
The Independent reports that the UK energy price cap will rise by 2% from October 1, with typical household bills increasing from £1,720 to £1,755 annually. Despite wholesale prices falling slightly, standing charges are set to increase due to policy expansions like the Warm Home Discount, affecting low-income households. The Guardian highlights that millions of UK households are urged to submit meter readings before the cap increase to avoid overpaying, with estimates of overpayments reaching £125 million if ignored. Meanwhile, The Japan Times notes that Japanese power suppliers are raising rates despite government subsidies, with Tokyo Electric Power raising rates by ¥520, and gas companies increasing prices by ¥172-¥222, reflecting ongoing cost pressures. The Independent also discusses Ofgem's plans to introduce tariffs with lower standing charges, but critics warn these will not significantly lower bills and may even increase costs for high-energy users. Campaigners and consumer advocates express concern that these measures are limited and do not address the root issues of affordability and fairness in energy pricing.
How we got here
The UK government introduced the energy price cap in 2019 to limit what suppliers can charge consumers, based on wholesale energy prices. Recent increases are driven by rising network costs, balancing costs, and policy expansions like the Warm Home Discount. In Japan, subsidies temporarily offset rate hikes, but prices are still rising due to increased costs for suppliers.
Go deeper
Common question
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What Are the New Energy Tariffs Proposed by Ofgem?
The UK energy regulator Ofgem is planning to introduce new tariffs that give consumers more options on how they pay their energy bills. While these changes aim to increase flexibility, many are wondering if they will actually lower energy costs or just change how bills are calculated. Below, we explore what these new tariffs involve, how they might affect your bills, and when you can expect to see these changes in action.
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Citizens Advice is a network of 316 independent charities throughout the United Kingdom that give free, confidential information and advice to assist people with money, legal, consumer and other problems.
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Martin Lewis or Martyn Lewis may refer to:
Martin Lewis (artist) (1881–1962), Australian artist and printmaker
Martin Lewis (Australian actor) (born 1970)
Martin Lewis (basketball) (born 1975), American basketball player
Martin Lewis (cricketer) (born.