Millions of Britons are bracing for a sharp spike in their energy bills after Ofgem, the UK energy regulator, approved a record-breaking rise to its price cap.
Ofgem said the regulatory price cap—which is reviewed every six months—would rise by a historic 54 percent to £1,971 ($2,683) a year starting in April, the same month that taxes are set to go up in the UK.
Jonathan Brearley, chief executive of Ofgem, said the energy market had seen a sharp increase in global gas prices, which hit record highs in Europe last year.
“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas,” Brearley said.
Some 22 million households across Great Britain are expected to be impacted by the cap lift, which applies to households that are on their energy supplier’s default tariff.
Seeking to take the sting out of the steepening price tag for energy, the British government announced on Thursday that it would provide a series of financial support measures worth around £9 billion ($12 billion).
British finance minister Rishi Sunak said that the assistance schemes would help around 28 million households bear the burden of surging energy costs.
“For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest. But what we can do is take the sting out of a significant price shock for millions of families by making sure the increase in prices is smaller initially and spread over a longer period,” Sunak told lawmakers in the UK Parliament.
While the average UK household will see a £700 ($953) increase to their energy bills, the vast majority will see that cut by around £350 ($476) due to the support measures.
