Downward trend in wholesale prices set to limit price cap rise

A general downward trend in wholesale energy prices is forecast to limit the rise in the domestic price cap for October to December.

Cornwall Insight predicts the cap, due to be announced on 27 August, will rise to £1,737 a year for a typical dual fuel household this winter, up 1% from the current price cap.

It said although wholesale prices have been volatile their “general trend has been downwards” thanks to factors including the easing of rules on European gas storage stocks for the winter months.

“Looking ahead, we expect a small drop in the price cap in January. However, this is subject to geopolitical movement, weather patterns, changes to policy costs and the potential introduction of new policy costs such as those to support investment in new nuclear generating capacity,” it said.