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Britain’s household energy price guarantee will cost some £23 billion this winter, analysts estimated Thursday after regulator Ofgem lifted its cap on electricity and gas charges.
The state’s outlay for the policy, aimed at easing a cost-of-living crisis, will stand at £950 per home over the colder winter months, according to a LinkedIn post by research consultancy Auxilione.
Ofgem announced Thursday it will lift its so-called cap, which sets prices for consumers to an annual level of £4,279 in January from about £3,500.
The cap does not currently affect consumers but will slam the public purse because the government is heavily subsidising bills.
Since October, Britain has frozen the average annual bill at £2,500 as it seeks to cushion homes from rocketing energy prices after key producer Russia’s war on Ukraine.
The state guarantee will rise to £3,000 in April as part of last week’s tax-hiking austerity budget.
Official data showed Tuesday the energy price freeze added £4.0 billion to state borrowing in October alone.
The government has forecast that its energy price guarantee will cost £25 billion in 2022/2023, and a further £13 billion in 2023/2024.
Prime Minister Rishi Sunak has meanwhile agreed to a public information campaign to encourage Britons to save energy, media reported Thursday.
source: AFP
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