Expert forecaster predicts April price cap will be far higher than expected with bills set to increase over 2025

The energy price cap is set for its third consecutive rise in April as volatile markets push bills higher, according to a leading forecaster.

The Ofgem price cap increased to £1,738 in January and it was widely expected to increase again in April.

Energy consultancy Cornwall Insight had previously predicted the price cap would increase 4 per cent to £1,785 in April, while suppliers said it could go higher.

Cornwall Insight now predicts a typical dual-fuel household will pay out £1,823 from April. Of this, £911.47 would go on electricity and £991.52 on gas, for typical use.

Standing charges, which are a fixed charge paid regardless of usage, will fall from 60.97p per day to 53p for electricity, while gas charges will fall from 31.65p to 29p.

However, unit charges will increase from 24.86p/kWH to 26.57p for electricity, and from 6.34p/kWh to 7p for gas.

It marks a a 5 per cent, or £85, increase from January’s price cap, for a typical household and Cornwall Insight anticipates the situation ‘is unlikely to get better as the year progresses’.

Volatile international markets have pushed prices higher, while gas storage levels fell due to colder weather and reduced renewables production.

‘Uncertainty over the outlook for the April cap and beyond is also being compounded by a number of Ofgem consultations on its future structure,’ Cornwall Insight added.

Looking ahead, the forecaster anticipates prices to fall slightly in the third quarter of the year, before rising again in October.

‘While we’re not seeing a return to the peak of the energy crisis, the market is more volatile than it has been in quite some time, and households are bearing the brunt of cold weather and low gas storage levels across Europe,’ said Dr Craig Lowrey, principal consultant at Cornwall Insight.

Cornwall Insight welcomed the government’s push towards renewable energy, which should reduce bills in the long run, but acknowledged ‘it could be years before households see a decrease in energy costs’.

‘Higher energy costs only reinforce the need to accelerate our expansion of clean, reliable energy across the UK,’ said Lowrey.

‘It is clear, sticking with the status quo is simply not an option if we want to see long-term, sustainable bill reductions. 

‘That will mean ramping up investment in renewables, alongside continued reform of the electricity market, to ensure households reap the full benefits from the transition.

‘That said, the government does have options to protect consumers while we are on the renewable energy journey. 

‘Short-term measures, from social tariffs to one-off payments, will be crucial to ensure that the most vulnerable are protected and that the burden of rising costs does not fall disproportionately on those least able to afford it.’