HOUSEHOLD energy bills are forecast to drop by a fifth below £2,000 for the first time since December 2021.
After energy prices jumped sixfold in the wake of Russia’s invasion of Ukraine, wholesale prices have been falling for the past six months which should also result in lower bills.
Analysts at Investec say they now expect energy regulator Ofgem to set average household bills at £1,981 in July.
Households have been paying a record £2,500 since October, when the government intervened by providing energy support and protecting Brits from the threat of £6,000 annual bills.
Last week Chancellor Jeremy Hunt confirmed the government would be extending its support for households and keeping bills at an average £2,500 rather than the planned £3,000 increase.
Martin Young, analyst at Investec, an investment bank, said that he expected energy bills to keep falling to £1,966 a year which would be the lowest since March 2022 and well below the government’s support cap.
Mr Young said that while the drop was welcome “it does not disguise that these estimates are still considerably higher than historic levels, and challenging for many.”
He said he urged the government, industry and regulators “to work together at pace” on introducing a social tariff to help the most vulnerable customers.
