Why High Energy Bills Look Like They Are Here to Stay

The government is under pressure to support billpayers when domestic energy prices predicted to rise further.

Energy bills may have been a long way from our minds through the sweltering summer.

Clothes on a washing line have been drying in minutes. Cold showers have been more tempting than hot ones.

The latest news and forecasts on gas prices will bring a renewed sense of worry and urgency to families, as well as government ministers.

Energy prices will rise by nearly 4% for millions of households in October. Even more striking is a prediction from the respected consultancy Cornwall Insight of a further 9% increase at the peak of winter in January.

The typical household's dual-fuel bill is now 70% higher than it was at the start of 2021, before Russia's invasion of Ukraine.

Millions have shifted onto fixed tariffs, with 35% of billpayers on such a deal. The heatwave has reduced the amount of energy stored across Europe, which needs to be restocked, piling more pressure on prices.

The government and Ofgem wants to shift the country away from our reliance on gas, with its volatile international pricing. VAT will be cut on electricity bills in October, but that's been more than outstripped by an 8% rise in the price of gas.

Ministers may be tempted to do more of that, but could face criticism for simply shifting the burden off bills and onto taxes. The options are limited. The new chancellor, John Healey, has choices to make - with lots of calls for help but with limited room for manoeuvre in the public finances.

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Energy prices have been predicted to rise further by nearly 4% for millions of households in October and a further 9% increase at the peak of winter in January.