Ofgem has confirmed that the energy price cap will fall to £1,690 – the lowest level in two years.

In recent years, UK households have had to contend with record-high energy prices due to surging demand following the relaxation of Covid-19 lockdown rules, and then the war in Ukraine, which effectively took fossil fuels of Russian origin out of the market.

Compared with other European countries, the UK has been particularly affected by high wholesale costs as the privatised energy sector left households open to the full brunt of high market prices coupled with very limited gas storage following the closure of several sites by the government.

The price cap, as set out in law in 2018, reflects what it costs to supply energy to our homes by setting a maximum that suppliers can charge per unit of energy, and caps the level of profits an energy supplier can make to 1.9%. It will now fall by 12.3% on the previous quarter, saving average households roughly £238 over the course of a year.

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