Higher than expected rise in energy bills from April

The average annual energy bill is set to increase to £1,849 from April – the third consecutive rise to the energy price cap by industry regulator Ofgem. 

The new figure represents a 6.4%-a-year increase in the typical sum most households pay for gas and electricity when using direct debit – higher than experts expected.

It means a household using a typical amount of gas and electricity will see their annual bill rise by £111 a year, or £9.25 a month, taking the total bill to £1,849 a year.

Analysts had forecast a 5% rise in prices, before Ofgem’s announcement on Tuesday.

Only those on fixed-rate deals, around seven million homes, will see no change until their current term expires.

The price cap limits the amount suppliers can charge per unit of energy and is revised every three months.

The decision comes as a consequence of rising wholesale gas prices since the start of the year.

Europe has seen a price spike due to strong demand in recent months, driven by colder weather than in recent years.

That, in turn, has sapped stockpiles and even prompted a warning last month from the owner of the UK’s biggest gas storage facility that levels were “concerningly low”.

The UK is heavily reliant on gas for its home heating and also uses a significant amount for electricity generation.