The price cap on energy bills could top £5,000 next year according to the direst forecast yet
Energy bills are expected to cost UK households more than two months’ wages next year unless the government intervenes, the TUC has warned.
The average after-tax net wage in 2023 will be £2,054 a month, according to the union, meaning two months’ worth will be less than the projected cost of energy bills of £4,200 per household.
The TUC urges ministers to consult with union and business leaders to develop an urgent response to the crisis and said the approach should be similar to measures taken during the Covid pandemic when the furlough scheme was introduced became.
The union has called for a range of measures to stem rising energy costs, including halting October’s increase in the energy price cap, bringing forward the annual increase in the national minimum wage from April to October and funding pay rises for public sector workers who stay up with inflation.
TUC General Secretary Frances O’Grady argued that no one should be struggling to make ends meet in one of the richest countries in the world.
She said: “Across the country, millions of families are being marginalized by staggering energy bills. With prices set to skyrocket even further, it’s time to say enough is enough.
“Boris Johnson, Liz Truss and Rishi Sunak need to realize the magnitude of this crisis. This requires pandemic-scale intervention.
“Ministers must stop the catastrophic rise in energy bills this autumn and to ensure energy remains affordable for all, they should bring retail energy companies into public ownership.
Ministers should also act to raise wages – as well as Universal Credit, pensions and the minimum wage – by bringing forward planned increases to October, and they should fund this through a bigger windfall tax on the energy giants’ obscene profits.
Ms O’Grady added that without a long-term plan to prevent a similar living standards emergency, the country will continue to “tumble from crisis to crisis”.
How much will energy costs increase?
In a new forecast, models designed by experts at energy consultancy Auxilione predict the energy bill price cap could reach £3,628 in October, up from £1,971 today.
The cap could then rise again to £4,538 in January and peak at £5,277 in April.
It’s the latest in a series of increasingly gloomy forecasts that continue to rise as gas and electricity prices continue to rise in wholesale markets.
The April forecast, released on Friday morning (12 August), is £240 more expensive than the previous forecast for the same month, released just 24 hours earlier.
The figure given for the price cap is based on the consumption of an average household. Those using more than average will have to pay more, and those using less will face lower bills.
The cap is based on the price utilities pay to buy energy, which they then resell to households, and is changed four times a year, in October, January, April and July.
Most of the October price cap observation window has now expired, leaving forecasters confident that their predictions will not be far off when Ofgem announces the cap on August 26th.
The latest prediction will put further pressure on politicians to act as Conservative lead candidate Rishi Sunak on Thursday (January 1)
Mr Sunak also pledged more targeted aid to vulnerable households but said he would confirm how much support he would receive later this month when the October price cap is set.