Ofgem today announced the price cap will rise by £693 in England, Scotland and Wales, an increase of 54 per cent. This means bills for the average customer will rise to £1,971, up from its previous limit of £1,277.
This is just one factor in the soaring cost of living. Food prices are rapidly increasing. National Insurance is due to be hiked. Borrowers, including some mortgage holders, will feel the impact of the 0.5% hike in interest rates announced by the Bank of England today. Council taxes are due to rise in many areas, though lessened by a one off reduction of £150 to ease the burden of the surge in energy prices.
Those on pre-payment meters, who are often the most insecure in their finances and housing, will typically see their annual bills rise by £708 from £1,309 to £2,017. around £14 a week.
Even for relatively wealthier households, the loss of an average £13 a week to the energy companies will suck money out of the local economy.
The big fear is that households already skimping on heating will begin to sit in the cold affecting their health and wellbeing. The Big Squeeze could become the Big Freeze.