Britain’s energy watchdog will this week be forced to defend a “significant” rise in fuel bills for 11m households that had been promised protection from “rip-off” prices by Theresa May, prime minister. Ofgem will on Thursday announce a substantial increase in an energy price cap that only came into force at the start of 2019 and was intended to save £76 a year on average for 11m households on expensive, variable “default” tariffs. Ministers, backbenchers and opposition politicians pushed for a limit to be imposed on the tariffs, which tended to be significantly more expensive than fixed-price deals and were vulnerable to sudden and substantial increases by energy companies. Analysts and utility companies are expectingthe cap to be increased by around £100 from the £1,137 limit that came into force on January 1 for typical customers buying both gas and electricity. The higher limit, which will apply from April 1, will reflect a substantial change in wholesale prices between the start of August last year and the end of January compared to a prior five-month period used to calculate the first cap. Policymakers are nervous, however, that a rise so soon after the cap came into force will be a hard-sell to consumers.
FT 3rd Feb 2019 read more »