Ofgem Director Speaks on Energy Price Cap Outlook
British Gas, Octopus, EON, Ovo, and EDF customers have received a key energy bill price update from Neil Kenward, the interim director general of markets for the energy regulator Ofgem. Speaking on the Making Money podcast, Kenward addressed the trajectory of energy costs and the challenges facing households.
Price Cap Has Risen 50% Since 2019
Kenward stated: "We look at what's happened in the price cap between pre-crisis, so say 2019, and now. And basically, the price cap has gone up almost 50 per cent." However, he noted that in real terms, accounting for income growth, the increase is closer to 15%. He emphasized that energy bills remain a significant affordability challenge for many people.
Government Intervention Needed for Affordability
Kenward explained that Ofgem cannot solve the affordability challenge alone: "We can help by the way we regulate the system. We can keep costs as low as possible. But ultimately, it becomes a government choice about interventions like the Warm Home Discount to help households that are struggling to pay their energy bills." He expressed doubt that bills will return to pre-crisis levels, though government interventions have brought them closer in real terms.
October Price Cap Forecast Slight Drop
According to Cornwall Insight, the energy price cap is forecast to fall by around 0.5% in October compared to July, thanks to a US-Iran 60-day ceasefire stabilizing wholesale gas markets. However, conflicting reports on the reopening of the Strait of Hormuz, slow peace talks, and uncertain timelines for repairing regional infrastructure mean prices remain high, though less volatile than in spring. Cornwall expects a typical household bill of £1,849 from October.
