Kevin Peachey,Cost of Living Correspondent
Forecasts suggest annual household energy bills could fall by a further 7% in July, with new price caps due to be announced at a later date.
Regulator Ofgem is widely expected to lower the caps when it publishes an outline of the latest quarterly levels for England, Wales and Scotland at 7am BST.
Consultancy Cornwall Insight predicts that the average household's energy bill could fall from £1,690 to £1,574 a year.
The cap sets a limit on the maximum price per unit of energy, not the total bill.
This means that the more energy you use, the more you pay.
The bill will affect gas and electricity bills for 29 million households, but will not affect customers in Northern Ireland, where the gas sector is regulated differently but has seen prices fall.
Reduce the burden
Energy prices are at their lowest since Russia invaded Ukraine in February 2022. But bills remain well above pre-pandemic levels.
The cap reduction in April meant homes using the average amount of energy could save £238 a year, or around £20 a month.
Prepaid meter customers, who tend to top up their meters during the colder, darker months, will be less directly affected by the summer price drop following a previous drop in April.
Most households pay by direct debit and payments have been spread out throughout the year. Suppliers should provide more information about price changes in the coming days.
Suppliers will determine the level of direct debit based on past and future forecasted usage, and customers can contest any changes by speaking to their energy supplier first.
Winter Forecast
Looking further ahead, Cornwall Insight predicts that billings will rise slightly in October before falling again in January next year.
Falling energy prices have already pushed inflation down to its lowest level in almost three years, and any further decline could feed through to the inflation rate and provide further impetus for the Bank of England to cut interest rates.
Ofgem is also seeking views on how the price cap will be calculated, including whether changes to flat-rate charges should be made.
This is a fixed daily charge that covers the costs of connecting to the supply and has risen sharply in some areas.
How to reduce your energy usage and electric bills during warmer months
Sarah Osborne shared three tips for managing energy use during the warmer months.
- If the water is too hot to wash your hands, your boiler temperature is set too high and you should turn it down.
- Manage drafts by, for example, placing a black bag filled with crumpled paper over unused chimneys, or limit other drafts around the home.
- Limit your shower time to four minutes or less. The charity WaterAid says: 4 minute song playlist To save time
If you're struggling to pay your electricity bill, see here