Energy bills are set to rise again in January, with analysts predicting a one per cent increase that will push typical household costs to £1,736 per year.
Cornwall Insight’s latest forecast shows bills will climb from the current price cap of £1,717, marking another cost of living blow for consumers after October’s increase.
The energy consultancy has revised its previous prediction, which had suggested a small decrease to £1,697 for the new year.
The announcement comes as millions of households prepare for the winter months, with the new cap due to take effect from January 1.
Ofgem is set to announce the official January price cap this Friday, November 22. The price cap is a limit on the maximum amount that energy suppliers can charge for each unit of energy and standing charge.
The sustained high energy costs are being attributed to several factors, including geopolitical tensions and maintenance work on Norwegian gas infrastructure.
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Revised predictions for Ofgem’s energy price suggest that energy bills will rise in the New Year
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Weather disruptions have also played a role in keeping prices elevated, according to Cornwall Insight’s analysis.
There is some potential relief on the horizon, with Cornwall Insight predicting slight drops in energy prices for both April and October 2025.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “Our final price cap forecast for January indicates, as expected, bills will remain largely unchanged from October.
“Supply concerns have kept the market as volatile as earlier in the year, and additional charges have remained relatively stable, so prices have stayed flat.”
“While we may have seen this coming, the news that prices will not drop from the rises in the Autumn will still be disappointing to many as we move into the colder months,” he added.
Dr Lowrey emphasised that fuel poverty remains a pressing issue requiring immediate action.
“Options like social tariffs, adjustments to price caps, benefit restructuring, or other targeted support for vulnerable households must be seriously considered,” he said.
Looking to the future, he stressed the importance of transitioning to renewable energy sources.
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Energy bills are expected to rise this winter GETTY “Long-term, our transition away from the volatile global wholesale market toward sustainable, home-produced renewables can help to secure our energy future,” he said.
He concluded with a stark warning to policymakers: “The Government needs to keep momentum on the transition while acknowledging that immediate support is essential for those struggling now. Inaction is a choice to leave people in the cold.”
Ahead of the pending changes to the energy price cap, Ofgem is reportedly examining the future of price protection in the UK.
This includes considering the long-term sustainability of the energy price cap and a potential permanent ban on acquisition tariffs.