Home energy bills in the UK could soar to £3,850 from January, after Russia further squeezed Europe’s gas supplies, according to a forecast that would spell further misery for people already struggling to afford gas and electricity.
The prediction, which some industry sources said should be treated with caution, follows a surge in European gas prices, as Russia cut flows through the Nord Stream 1 pipeline.
The energy-focused management consultancy BFY said it now expected October’s price cap to hit £3,420, while the subsequent rise in January could be as high as £3,850.
That would mean home energy bills would have tripled in the space of a year, given that the cap was set at £1,271 at the beginning of 2022. BFY said the average customer could end up “facing a bill of £500 in January alone”.
One source at a major power producer said they thought the forecast was surprisingly high, with the figure likely to be closer to the £3,300 already predicted by the energy analysis firm Cornwall Insight.
Cornwall is expected to update its own predictions, factoring in fresh European gas price increases, early next week.
The Kremlin-controlled gas firm Gazprom said earlier this week it would cut flows through the Nord Stream 1 pipeline to 20% of capacity, a threat it has delivered on. It blamed problems with turbines, which it said had been made worse by sanctions, imposed by the west because of the invasion of Ukraine.
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Europe is scrambling to reduce reliance on Russian gas, with rationing now an option for the coming winter.
The BFY prediction will pile pressure on the UK government to give more help to struggling households. The former chancellor Rishi Sunak, who is vying with Liz Truss to become the next prime minister, said this week he would temporarily scrap the 5% VAT rate on domestic energy bills.
If bills do rise as high as BFY predicts, that would save the average household £192, compared with an increase over the past year of more than £2,500.