Bank Of England Warns Energy Bills Will Rise To £2,800 This Year
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The Bank of England has warned that energy bills could rise to £2,800 this year, amidst the growing cost of living.
Predicting that inflation will peak at 10% in the autumn - which is a record high - the Bank believes energy bills will once again rise in October by as much as 40 per cent, taking the average bill to more than £2,800 per year.
As of Thursday, the Bank has also raised interest rates to 1% - which is the fourth consecutive increase.
"Consumer Price Index inflation is expected to rise further over the remainder of the year, to just over 9% in 2022 Q2 and averaging slightly over 10% at its peak in 2022 Q4," the Monetary Policy Committee said on Thursday.
"The majority of that further increase reflects higher household energy prices following the large rise in the Ofgem price cap in April and projected additional large increase in October.
"The price cap mechanism means that it takes some time for increases in wholesale gas and electricity prices, and their respective futures curves, to be reflected in retail energy prices.
"Given the operation of the price cap, consumer price inflation is likely to peak later in the United Kingdom than in many other economies, and may therefore fall back later. The expected rise in CPI inflation also reflects higher food, core goods and services prices."
Brits have been hit hard by soaring energy, fuel and food costs over the last few months. In January, it was reported that the proportion of British households struggling to pay their energy bills would triple by April, according to the Resolution Foundation.
From April, Ofgem's price cap rose from £1,277 to £1,971, meaning the average household bill could increase by around £693 per year.
Last month, we told you how you could save over £132 a year by making one small change in your home.
Money saving brand Discount Code has revealed the appliances that can save you money, simply by switching them off.
And your TV could be a big saver.
They explain: "A 2021 study showed that a massive 98 per cent of UK households admit to leaving their TV on standby at all times, with many wrongly assuming that turning off via the remote switches it off entirely – however this isn’t always the case.
"Leaving the TV plugged in and switched on uses 1.3kWh. As the average cost of electricity is now £0.28 per unit, this can add £132.86 a year to your bill."
You can read more here.