Energy bills predicted to fall by 7% in July

Domestic energy bills are predicted to fall by a further 7% in July, offering some relief to households struggling with their budgets.

The bill for a home using a typical amount of gas and electricity could drop from £1,690 a year to £1,574, according to consultancy Cornwall Insight.

That follows previous falls and would mean a typical annual bill could be £500 down on last summer.

The energy regulator, Ofgem, will announce the level of the quarterly price cap from July on 24 May.

Ofgem's latest quarterly price cap affects 29 million households in England, Wales and Scotland. Rules are different in Northern Ireland, where prices are also falling.

The price cap sets the maximum amount suppliers can charge for each unit of gas and electricity but not the total bill - so if you use more, you will pay more.

Energy prices are already at their lowest level since Russia's full-scale invasion of Ukraine in February 2022, but - even with this predicted fall - would remain higher than pre-pandemic norms.

"We must recognise lower prices don't erase all the problems," said Craig Lowrey, from Cornwall Insight.

"The very fact we are still seeing bill levels which are hundreds of pounds above pre-crisis levels underscores the ongoing challenges faced by households."

Looking further ahead, the consultancy has forecast bills would go up slightly in October before falling again the following January.

Ofgem is gathering views on the way the price cap is calculated, including whether there should be a change to standing charges.

They are the fixed daily charges covering the costs of connecting to a supply, which have risen sharply in some areas.

A fall in energy bills would feed through to the rate of inflation, and may create more impetus for the Bank of England to reduce interest rates.

• Check your direct debit: Your monthly payment is based on your estimated energy use for the year. Your supplier can reduce your bill if your actual use is less than the estimation
• Pay what you can: If you can't meet your direct debit or quarterly payments, ask your supplier for an "able to pay plan" based on what you can afford
• Claim what you are entitled to: Check you are claiming all the benefits you can. The independent MoneyHelper website has a useful guide

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