Energy bills are about to rise again, and the companies that sell them are telling the government to stop waiting.
On Thursday, domestic gas prices went up. Forecasts point to steep increases in January, with Cornwall Insight’s latest forecast suggesting a typical dual-fuel bill could reach £1,999 in the new year. That is a sharp climb from the current level of around £1,723, pushed up by a 4% price increase at the start of October that amounts to about £60 per year, or £5 per month.
The trade body Energy UK is making the case for urgent action. It says bills are rising as they did in 2022, when they were driven up by the impact of Russia’s invasion of Ukraine. Dhara Vyas, chief executive of Energy UK, said: “We cannot afford to wait for the same scale of crisis before acting again. We must heed the lessons from that time.”
The Numbers Behind the Price Cap
The figures shown by the BBC reveal forecasters predict a 16% rise in domestic energy prices in the new year, affecting 20 million households on variable tariffs under Ofgem’s price cap. That cap sets the maximum suppliers can charge, but wholesale costs still drive the underlying bills.
High wholesale prices paid by suppliers are the main driver. Conflict in the Middle East and shipping disruption through the Strait of Hormuz have pushed those costs up, erasing savings from VAT cuts and levies that were cancelled or moved into taxation earlier this year.
Vyas on the Debt Burden
Vyas also pointed to a quieter drag on household budgets: growing customer debt. She said it adds an average £67 per year to everyone’s bills.
She warned against last-minute fixes. “Last-minute emergency interventions run the risk of being badly targeted and costing us all more,” she said.
Rossi’s Warning Echoes
On Thursday, EDF Energy boss Simone Rossi warned the UK was “walking into a second energy crisis”. Vyas echoed that action is needed before bills jump again.
Prime Minister Andy Burnham told the BBC he would not call Rossi’s warning an overstatement. He said home energy, petrol and diesel costs were “very difficult indeed”.
What Energy UK Wants
The trade body is asking for more than words. It wants targeted support beyond the £150 Warm Home Discount given to benefit recipients, leading to a discounted social tariff. It also wants a debt relief scheme for severely affected households, plus a strategy helping prevent debt among new tenants and homeowners.
Energy UK is also calling for removing more levies from electricity bills and shifting them to taxation, as part of a move toward electrification.
The Government’s Response So Far
Burnham has said the government is considering any measure that eases pressure. But the specifics have not yet been announced.
The Pattern of Past Crises
The 2022 spike came after Russia’s invasion of Ukraine. Wholesale prices soared, and households felt the pain quickly.
Now the same pattern is repeating. Wholesale costs are pushing bills back up, and the price cap mechanism means those rises eventually feed through to customers.
The Cost to Households
A 16% rise on 20 million households is not abstract. For families already struggling with higher living costs, a jump in bills is a real burden.
The £1,999 figure is a projection, not a promise.
What Happens Next
The government has said it is considering measures. Energy UK has set out its asks.
The question is whether the government moves fast enough. Last-minute interventions, Vyas warned, risk being badly targeted and costly.
Where the paper stands
The paper backs Energy UK’s call for urgent action to keep energy costs down and is against letting bills rise without restraint. The forecast of a £1,999 dual-fuel bill by January shows the scale of the problem, and the 20 million households affected make this a national concern, not a local one.
The paper’s scepticism of foreign entanglements and its support for the deal over the standoff apply here too. The conflict in the Middle East and shipping disruption through the Strait of Hormuz show how global events push up wholesale costs, and the paper would prefer solutions that target bills directly rather than relying on last-minute interventions that cost everyone more.
The government should act now on Energy UK’s asks: targeted support beyond the £150 Warm Home Discount, a debt relief scheme for severely affected households, and a move toward smarter tax treatment of electricity bills. The lesson of 2022 is that waiting for a full-blown crisis is the wrong approach.
Key Facts at a Glance
| Item | Detail |
|---|---|
| Forecasted January price rise | 16%, affecting 20 million households |
| Typical dual-fuel bill projection | £1,999 in January |
| October price increase | 4%, £60 per year, £5 per month |
| Existing discount | £150 Warm Home Discount for benefit recipients |
The stakes are high. Energy UK is right that waiting for a full-blown crisis is the wrong approach. The lessons of 2022 are still fresh.
The government should listen. Targeted relief, debt relief, and smarter tax treatment of bills are all worth doing before the numbers get worse.
Source material: “Suppliers pile pressure on government over energy bills,” the BBC.
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