The new energy price cap set by Ofgem, the British energy regulator, is below £2,000 for the first time in 18 months, but it remains significantly higher than during 2020 and 2021 before the Russian invasion of Ukraine pushed up energy prices.

The cap does not set the maximum a household will pay for their energy but establishes a maximum amount providers can charge per unit of gas or electricity. At its peak, the price cap reached £4,279. 

In the period between July and October 2023 the price cap was set at £2,074. 

The new cap has reached the lowest level since October 2021. According to the regulator, this reflects further falls in wholesale energy prices as the market stabilises and suppliers return to a healthier financial position.

However, Ofgem has warned that, over the last year, consumers have been shielded from the dramatic rise in energy bills by initiatives such as the £400 Energy Bill Support Scheme, which came to an end in July. 

Moreover...