The average annual energy bill will increase to £1,849 from April as the industry regulator Ofgem increases the price cap for the third time in a row. The new figure represents a 6.4% a year - or £9.25 per month - increase in the typical sum the vast majority of households face paying for gas and electricity when using direct debit.
This means typical bills are £159 more expensive than last year's. Only those on fixed-rate deals, around eleven million homes, will see no change until their current term expires. The price cap limits the amount suppliers can charge per unit of energy and is revised every three months.
The decision comes as a consequence of rising wholesale gas prices since the start of the year. Europe has seen a price spike due to strong demand in recent months, driven by colder weather compared to recent years. That, in turn, has sapped stockpiles and even prompted a warning last month from the owner of the UK's largest gas storage facility that levels were "concerningly low".
The UK is heavily reliant on gas for its home heating and also uses a significant amount for electricity generation. Follow our channel and never miss an update. The government is investing heavily in more UK-based renewable energy, such as wind and solar farms, to ease the country's current reliance on gas imports.
Labour's target is to achieve 95% clean power across the electricity grid by 2030. Market analysts expect natural gas costs to remain elevated in the coming months due to Europe's need to restock ahead of next winter. Be the first to get Breaking News. Install the Sky News app for free.
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