Cornwall Insight forecasts £1,999 typical energy bill from January

Cornwall Insight forecast on 30 September that the annualised gas and electricity bill for a typical household in Great Britain could reach £1,999 from January 2027. That would be £276, or 16%, above the October price-cap figure. It is a prediction of the January to March cap, not a decision by the regulator Ofgem.

The new figure matters because roughly 20 million households in England, Scotland and Wales are on variable tariffs covered by Ofgem’s cap, according to the BBC. Their charges are already due to rise from 1 October, when the annualised figure for a typical dual-fuel household paying by direct debit becomes £1,723. The January forecast points to a further increase during the coldest part of the year.

How Cornwall Insight reached its £1,999 forecast

Cornwall Insight puts its national-average forecast at £1,999.28, made up of £959.44 for electricity and £1,039.84 for gas. Its calculation uses Ofgem’s current typical domestic consumption values: 2,500 kilowatt hours of electricity and 9,500 kilowatt hours of gas a year. The forecast page was updated on 30 September using market figures from the close of trading on 28 September.

The consultancy says it applies Ofgem’s price-cap method to current wholesale gas and electricity prices, alongside its own estimates of other costs. Those other elements include network charges, policy costs, taxes and an assumed supplier margin. Cornwall Insight says it has no role in Ofgem’s eventual decision.

What changed since the October energy cap

The January projection follows a rise already set for October. As covered in NewsJaws’ earlier report on Ofgem’s October cap, the typical annualised figure moves to £1,723 from 1 October. The BBC puts that increase at about £60 a year, or £5 a month, if the October rates lasted for a full year. The newly forecast January increase is much larger than that October change.

The Guardian reports that Cornwall Insight had previously predicted a 9% January rise. It says the consultancy linked its higher projection to a recent increase in gas-market prices. The BBC reports Cornwall Insight’s explanation that disruption to gas supplies linked to conflict in the Middle East, together with low European gas-storage levels, is pushing prices upward. Those are explanations for the forecast; they do not fix the final household charge.

Craig Lowrey, a principal consultant at Cornwall Insight, said January would be especially difficult for households facing cold weather and finances still recovering from Christmas. He told the BBC the predicted rise would hit households hard. His warning concerns what could happen if the forecast is borne out, rather than a cap already announced by Ofgem.

Pressure for support as bills and debt rise

The BBC reports that customers collectively owe energy suppliers more than £5bn in unpaid bills and charges, citing recent Ofgem data. Adam Scorer, chief executive of fuel-poverty charity National Energy Action, called for targeted help this winter, action on energy debt and improvements to the least energy-efficient homes. His call reflects concern about households already struggling before a possible January increase.

EDF Energy chief executive Simone Rossi warned in a BBC interview that Britain was ‘walking into a second significant energy crisis’. He called for the government to extend the cut in VAT on electricity bills beyond April. That is Rossi’s assessment and policy request; the reporting does not establish that ministers will adopt it.

Prime Minister Andy Burnham told BBC Radio 4 that he would not describe Rossi’s warning as an overstatement. Speaking at the Labour conference in Liverpool, he said the cost of home energy and motor fuel was ‘very difficult indeed’ and that the government was looking at measures to give people breathing space. No further household-support measure is established by those remarks.

When Ofgem will set the January cap

Ofgem is expected to announce the actual January price change in late November, according to the BBC. Until then, Cornwall Insight’s £1,999 figure remains sensitive to changes in wholesale prices and other components of the cap. The consultancy’s forecast is a useful indication of the pressure on bills, but the final rates and each household’s spending will depend on Ofgem’s decision and the energy that household uses.