British households were on Friday bracing for a bleak winter as regulators announced an 80 per cent leap in energy bills in what they acknowledged was “devastating news”.
Ministers were warned of a consumer revolt if they did not increase support for households, with Ofgem telling households that things could get “significantly worse” in 2023.
Bills for a typical household will rise to the equivalent of £3,549 ($4,186) a year from October, up from £1,971.
Analysts at Cornwall Insight, who correctly predicted the jump, said another steep rise to £5,386 was on the cards when the price cap is next updated in January.
Boris Johnson, the departing prime minister, is tied by a pledge not to make major decision before he steps down but said on Friday the next government should "target" the most vulnerable households with support on energy bills, not cap overall rates.
The pressure on the new leader, due to be named on September 5, is for a significant support package. "It’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming,” said Jonathan Brearley, chief executive of Ofgem. “The response will need to match the scale of the crisis we have before us."
Ms Truss, the favourite to assume power on September 6, said she would “ensure people get the support needed” — without offering new commitments beyond the £15 billion package announced by the government in May.
Allies of Ms Truss said she could not make further spending promises until she had “seen all the facts” but that “people can trust” that she would make energy bills affordable.
Conservatives on the campaign trail - in pictures
Mr Sunak said he would “go further” than he did in May because the situation had deteriorated since, as he took aim at Truss campaign proposals he said would do little for vulnerable pensioners.
“My priority is to protect the most vulnerable in society, including pensioners, and I want them to have certainty that extra help is coming,” he told Sky News.
Consumer champion Martin Lewis said “lives will be lost this winter” if more support was not announced to deal with what he called “unaffordable, terrible rises in energy bills”.
Mr Lewis said people refusing to pay their bills could become “a louder voice in this country” if government support did not act.
“This is a catastrophe, plain and simple, unaffordable,” he said.
The government was accused of hiding from the crisis after no minister was made available to speak to broadcasters on Friday morning.
Chancellor Nadhim Zahawi eventually emerged to say he was “working flat out” to draw up options for the next administration.
He suggested for the first time that people should consider saving power, saying: “The reality is that we should all look at our energy consumption … there is war on our continent.”
The opposition Labour Party said ministers were “missing in action” during the leadership contest.
“You’ve got a prime minister who insisted on staying in office, recognises there’s a problem with energy prices, shrugs his shoulders and does nothing about it,” said Labour leader Sir Keir Starmer.
Ofgem said the increase reflected a global peak in gas prices partly linked to the fallout from the coronavirus pandemic but sent into overdrive by the Russian invasion of Ukraine.
Russia cut off gas supplies to several European countries after the war poisoned East-West relations, and has drastically reduced exports through its main pipeline to Germany.
Although Britain imports relatively little energy directly from Russia, the squeeze across Europe means it cannot escape high prices when it imports gas and electricity from the continent.
Both Mr Sunak and Ms Truss have spoken of wanting to make Britain more energy independent, while also voicing scepticism about the prospect of expanding solar energy and onshore wind.