The final forecast for the first quarter of 2024 from consultancy Cornwall Insight has been released and it predicts that from January, UK households will be seeing higher energy bills as the national regulator Ofgem brings its price cap up to £1,931 ($2,395) for ordinary consumers.

The consultancy noted that it will be an increase of 5% over the current price cap, which presently sits at £1,834 per year for a typical consumer.

Although the consultancy sees prices sitting well below the record levels seen during last year’s winter heating season during the energy crisis in Western Europe, they will remain well above historical norms.

From the end of March 2024, Cornwall Insight said that the price cap would decline, “although this remains subject to the ongoing volatility in the wholesale energy markets.”

The consultancy noted that geopolitical concerns, such as the disruptions to the Balicconnectr natural gas pipeline, the conflict between Israel and Hamas, and labor actions being taken at gas production facilities in Australia, have all contributed to the higher energy prices.

Craig Lowrey, Principal Consultant at Cornwall Insight, said, “An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels. This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between.”