Energy Price Cap expected to decrease by 8% for July, but is the prediction too generous?

The energy price cap for the three months starting from July will be disclosed by the regulator Ofgem in a week’s time.

Predicted Decrease

Energy research analytics and consulting company, Cornwall Insight, has predicted that rates are anticipated to decrease by 8% for the period 1st July 2024 to 30th September 2024.

Potential Cost Savings

This projection would result in the annual cost for an average direct debit paying household to drop by £130, from £1,690 to £1,560.

However, Money Saving Expert, Martin Lewis, has cautioned on his BBC Podcast that slight increases in wholesale rates might occur due to the turmoil in the Middle East, potentially undermining the initial predictions’ generosity.

Ofgem’s Price Cap

Ofgem’s price cap, affecting around 29 million households in England, Scotland, and Wales, was introduced to shield consumers from excessively high energy prices. The price caps are revised in January, April, July, and October. However, it’s important to note that the price cap doesn’t guarantee lower energy bills for customers; rather, it aims to prevent them from being overcharged.

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