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Thursday, Oct 22, 2026

Energy bills forecast to remain above £2,000 in blow to Sunak’s loan scheme

Energy bills forecast to remain above £2,000 in blow to Sunak’s loan scheme

Analysts warn that prices will stay higher for longer, adding pressure to struggling households
Energy bills will stay well above £2,000 for two more years, according to leading analysts, who warned that prolonged high prices threaten the chancellor Rishi Sunak’s loan scheme to help households cope with sky-high gas prices amid the mounting cost of living crisis.

Cornwall Insights, which predicted the recent 54% rise in the cap on average energy bills to £1,971, said it had increased its forecasts for upcoming changes to the ceiling, which is determined by the energy regulator, Ofgem.

It warned that prices staying higher for longer would undermine Sunak’s plan to ease the pressure on household finances by giving bill payers a one-off £200 discount on bills, paid back in £40 instalments over five years.

Cornwall left its prediction for the coming winter unchanged, estimating that the price cap will hit £2,607, meaning households will have seen their bills double in the space of a year. While it expects the cap to fall from that record high, it no longer expects a significant drop.

Its forecast for the winter period starting in 2023 is now £2,284, up from a prediction of £2,040 made at the end of March. Cornwall analysts believe the price cap will still be as high as £2,233 by spring 2024.

The change comes after gas prices stopped dropping sharply and began to level off, with the risk now weighted towards further increases.

Craig Lowrey, the principal consultant at Cornwall Insight, urged the government to come up with new measures to help households cope with bills and reconsider its omission of energy efficiency from Boris Johnson’s energy security strategy, unveiled last week.

“The cheapest energy is that which you don’t use, so to reduce bills for consumers, the government really must look again at how to support reductions in energy consumption for all consumers, including those in fuel poverty,” Lowery said.

“The exclusion of material new policies for energy efficiency in the energy security strategy were a missed opportunity. While the government has already offered some support for consumers to pay their energy bills this year, this was before forecasts began predicting further rises, and over a longer period.

“It is possible the government could take further action in the autumn, but we have no guarantees that further support will be forthcoming.

“Of course, many of the variables which drive our forecasts can change before the cap setting periods for next year, but the risk is weighted to the upwards rather than downwards pressure on the price cap right now.

“And with costs of living rising, and inflation hitting a record high in March before the cap rise of 1 April feeds through, then even the potential for these sorts of cap levels to arise in 2023 will be concerning for hard hit households.”
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