What's happened
UK households are facing a 1% increase in energy bills starting January 2025, with the average annual cost expected to reach £1,736. This rise adds to ongoing financial pressures amid high energy prices driven by geopolitical tensions and supply issues.
Why it matters
What the papers say
According to The Guardian, analysts from Cornwall Insight predict that the energy price cap will rise to £1,736, a 1% increase from the current cap of £1,717. This forecast is attributed to ongoing geopolitical tensions and maintenance issues affecting energy supply. Dr. Craig Lowrey from Cornwall Insight emphasized that while the price cap remains largely unchanged, the lack of expected decreases is disappointing for many households. The Independent highlights that the energy crisis has led to a significant rise in fuel poverty, with millions unable to heat their homes adequately. The Guardian also reports that over 70 major retailers have signed an open letter to Chancellor Rachel Reeves, warning that increased national insurance contributions will lead to job losses and higher prices, further straining household finances.
How we got here
The energy price cap, set by Ofgem, has become a critical measure for household finances since the energy crisis began in early 2022 due to the war in Ukraine. Previous expectations of a price drop have been dashed by sustained high wholesale prices.
Common question
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Why Are Energy Bills Rising Again in the UK?
As the UK faces another increase in energy bills starting January 2025, many households are left wondering how this will impact their finances. With the price cap set to rise to £1,736, it's crucial to understand the reasons behind this increase and what it means for consumers. Below are some common questions regarding the current energy crisis and its implications.
More on these topics
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Ukraine is a country in Eastern Europe. It is the second-largest European country after Russia, which borders it to the east and northeast.
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Great Britain is an island in the North Atlantic Ocean off the northwest coast of continental Europe. With an area of 209,331 km², it is the largest of the British Isles, the largest European island, and the ninth-largest island in the world.
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Russia, or the Russian Federation, is a transcontinental country located in Eastern Europe and Northern Asia. Covering an area of 17,125,200 square kilometres, it is the largest country in the world by area, spanning more than one-eighth of the Earth's in