Energy price cap to drop again in July

Residents in Newtown may be feeling relief over the news of a drop in energy prices, but experts warn that this decrease may only be temporary.

According to a recent announcement by the energy regulator, the average annual energy bill is set to be £506 cheaper than a year ago from July, bringing the average annual bill down to £1,568—a 7% reduction.

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However, this reduction comes after a significant spike in energy costs following Russia's invasion of Ukraine earlier this year, with standard bills skyrocketing to £1,690 per year for the current period from 1 April to 30 June.

Prior to the energy price shock, a typical bill was just £1,084, meaning that homes in Newtown are facing an extra cost of £484 when compared to three years ago.

Despite the slight relief brought by the falling energy price cap, many households are still struggling to make ends meet.

Dame Clare Moriarty, the chief executive of Citizens Advice, highlighted that while lower energy prices are helpful, millions of households are already in debt to energy providers or are unable to cover their essential costs each month.

Experts are predicting that this temporary drop in energy prices will not last long, with forecasts indicating that bills could increase again coming into the winter months. Respected research firm Cornwall Insight forecasts that a typical energy bill could rise to £1,762 from October and remain at this level until the end of March.

The increase in energy costs is attributed to rising wholesale gas prices, with concerns over potential disruptions in gas supplies from Russia to Europe and issues with US exports to Europe. This has led to gas prices reaching four-month highs earlier this week, further complicating the energy cost landscape for residents in Newtown.