UK looking to cancel imminent energy price rise

Chancellor Jeremy Hunt has been under growing pressure to cancel a planned rise in energy bills

Without the extra support, millions of people would have faced greater struggles paying their energy bills. PA
Beta V.1.0 - Powered by automated translation

A planned £500 ($600) increase in average energy bills, which was due to come into force next month amid rampant inflation, is now expected to be cancelled by British Chancellor Jeremy Hunt.

Treasury officials are looking at ways to cancel a previously announced rise to £3,000 a year and keep average household bills at about £2,500.

The UK is in the middle of a cost-of-living crisis, in which inflation has spiked above 10 per cent and workers in several sectors have gone on strike demanding pay offers closer to that figure.

As all bills spiral upwards, Mr Hunt has come under increasing pressure in recent weeks to cancel the planned energy bill rise, which was set to come into force from April 1, and keep in place protections on price rises.

Industry watchdogs have pleaded for the move and demanded that it be done now and not delayed for the chance of a moment of political theatre in the coming budget in two weeks.

Without the extra support, millions of people would have faced greater struggles paying their energy bills.

As wholesale energy prices have dropped, it has become increasingly less expensive for the government to continue protecting customers from soaring prices.

Without the government's help already, the average household would have been paying an annualised bill of £4,300 between January and April. But the support was scheduled to be cut for April.

In effect, it means that the government has been paying about £1,800 towards each household's energy bills.

Now it is understood that the support is likely to stay at the same £2,500 for a further three months. At the end of that period, forecasters expected bills to be naturally at about £2,200.

Extending the aid that the government has put in place to help meet domestic energy bills is estimated by Cornwall Insight to add £2.5 billion to the bill of running the programme, which was introduced in September last year.

A separate voucher programme, which sends £66 per month to every household, is expected to come to an end in April.

Updated: March 03, 2023, 8:22 PM