This may include adverts from us and 3rd parties based on our understanding. Ministers are facing a growing pressure to find a solution to the cost of living crisis in Britain. Add to inflation rising, the termination of the furlough scheme and the scrapping of temporary uplift in Universal Credit, a rise in energy prices means Britons are facing a tough winter.
Business and Energy Secretary Kwasi Kwarteng is holding regular meetings with industry leaders to try and find a solution to the energy price crunch. Global wholesale energy prices have skyrocketed in recent weeks, forcing the collapse of a number of small suppliers. The price cap in 2019 means domestic suppliers are currently forced to provide electricity for a higher rate than the costing it is costing them to purchase. The price cap was introduced by The Prime Minister Theresa May in a bid to protect customers from being exploited by energy companies through high tariffs. Thousands at risk as another energy firm goes under audit?
Wholesale gas prices from the past six months are used to determine the levels of the cap. It means from the start of this month household were faced with a record cap of 1,277 a year. However, as the price of wholesale gas continues to increase rapidly, a further increase is expected next spring. Research firm Ofgem estimates Cornwall Insight that the industry regulator, Ofgem, will increase the cap to as much as 1,660. The below chart highlights how the estimated rise will increase by more than 60 percent in just 18 months. Back in summer 2020 the cap was placed at its lowest rate ever, at 1,042 a year. What could be the effect of mild winter on Kwasi Kwarteng: warmer temperatures and milder climate will reduce gas costs?
Since 12 September 2018, companies have gone bust due to greater cost pressures. It means around two million households have been forced to move to new companies through the so-called Supplier of Last resort. The UK is not the only country struggling with the cost of energy. Many countries in Europe are also suffering from the expensive price of purchasing.