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Household energy bills are set to fall by around 7% in July, according to new forecasts.
The typical household energy bill is expected to fall by £129 to £1,720 per year when regulator Ofgem’s new price cap comes into force, experts at Cornwall Insight have predicted.
Ofgem, which sets the limit on what energy companies can charge customers, is set to confirm its latest price cap on Friday.
The price cap is currently set at around £1,849 for a typical household after three consecutive increases in bills.
It is set to fall after US President Donald Trump’s aggressive tariff plans led to a significant slump in gas and oil prices.
However, the forecast is slightly reduced from a previously predicted 9% drop after easing trade tensions in recent weeks.
Cornwall Insight said it expects the reduced price cap to be followed by a “modest drop” in October and another similar dip in January next year.
Craig Lowrey, principal consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.
“It’s a step in the right direction, but it should be taken in context.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.
“As such, there remains a risk that energy will remain unaffordable for many.”
Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets.
The energy price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
It does not limit total bills, because householders still pay for the amount of energy they consume.
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