Household energy bills predicted to fall by 7% in July

Ofgem’s latest quarterly price cap affects 29 million households in England, Wales and Scotland. Rules are different in Northern Ireland, where prices are also falling.

The price cap sets the maximum amount suppliers can charge for each unit of gas and electricity but not the total bill – so if you use more, you will pay more.

Energy prices are already at their lowest level since Russia’s full-scale invasion of Ukraine in February 2022, but – even with this predicted fall – would remain higher than pre-pandemic norms.

“We must recognise lower prices don’t erase all the problems,” said Craig Lowrey, from Cornwall Insight.

“The very fact we are still seeing bill levels which are hundreds of pounds above pre-crisis levels underscores the ongoing challenges faced by households.”

Looking further ahead, the consultancy has forecast bills would go up slightly in October before falling again the following January.

Ofgem is gathering views on the way the price cap is calculated, including whether there should be a change to standing charges.

They are the fixed daily charges covering the costs of connecting to a supply, which have risen sharply in some areas.

A fall in energy bills would feed through to the rate of inflation, and may create more impetus for the Bank of England to reduce interest rates.