Finance

UK Households Look to Lock in Energy Prices as Crisis Recedes

UK Households Look to Lock in Energy Prices as Crisis Recedes

Fixed energy tariffs are making a comeback in the UK, allowing consumers to lock in power and gas rates now that prices have eased from last year’s record levels.

Author of the article:

Bloomberg News

Bloomberg News

Ellie Harmsworth

Published Aug 20, 2023  •  2 minute read

uc6lyx2)3b{wwh{xan29hz4x_media_dl_1.png
uc6lyx2)3b{wwh{xan29hz4x_media_dl_1.png Source: Ofgem, Cornwall Insights

(Bloomberg) — Fixed energy tariffs are making a comeback in the UK, allowing consumers to lock in power and gas rates now that prices have eased from last year’s record levels. 

The question is whether fixed rates are a good idea yet, as volatility continues to rattle Europe’s energy markets. 

“There is always a risk in signing up to a fixed energy deal, as bills may reduce further, leaving customers locked in at higher-than-market rates for a fixed duration,” said James Mabey, an analyst at energy consultancy Cornwall Insight.

Financial Post

THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY

Subscribe now to read the latest news in your city and across Canada.

  • Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
  • Daily content from Financial Times, the world’s leading global business publication.
  • Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
  • National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
  • Daily puzzles, including the New York Times Crossword.

SUBSCRIBE TO UNLOCK MORE ARTICLES

Subscribe now to read the latest news in your city and across Canada.

  • Exclusive articles by Kevin Carmichael, Victoria Wells, Jake Edmiston, Gabriel Friedman and others.
  • Daily content from Financial Times, the world’s leading global business publication.
  • Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
  • National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
  • Daily puzzles, including the New York Times Crossword.

REGISTER TO UNLOCK MORE ARTICLES

Create an account or sign in to continue with your reading experience.

  • Access articles from across Canada with one account.
  • Share your thoughts and join the conversation in the comments.
  • Enjoy additional articles per month.
  • Get email updates from your favourite authors.

For now, the tariffs appear to be a sign of Britain’s recovery from a regional energy crisis. There are now around 18 fixed rates available from nine providers, more than double what was on offer in mid-July, according to Uswitch.com, a price-comparison website. 

“The increase in fixed deals has prompted more people to switch energy suppliers,” said Natalie Mathie, an energy expert at Uswitch. “More than 200,000 people switched last month, an 83% increase year on year.”

The tariffs allow consumers to buy power and gas at an arranged price, rather than allowing rates to fluctuate up to the limit set by regulator Ofgem. Companies including E.ON Next, Shell Energy and Octopus Energy are offering rates below the price cap. Some plans are only available to existing customers.

Ofgem’s cap is meant to shield households from market volatility, but it effectively became the UK’s universal energy rate last year, after Russia’s invasion of Ukraine and curtailment of gas supplies triggered a supply crunch. Wholesale energy prices have since cooled, allowing providers to offer retail consumers more options.

However, the gas market has seen wild price swings in recent months, due to factors including unplanned outages, trader positioning, and concerns about global supplies amid potential strikes in Australia. In the UK, gas prices are up by about 30% in August. Futures could actually decline if the labor dispute in Australia is resolved, easing some tension in the market.

In the UK energy prices are forecast to decline in October as Ofgem adjusts its price cap following a quarterly review. The cap is expected to rise again in January as demand is typically highest in winter, due to the need for heating. 

—With assistance from Anna Shiryaevskaya.

Read More

Avatar

Admin

About Author

Leave a comment

Your email address will not be published. Required fields are marked *

You may also like

Harbourfront Wealth Appoints Head of Corporate Development to Meet Firm Growth Demands
Finance

Harbourfront Wealth Appoints Head of Corporate Development to Meet Firm Growth Demands

VANCOUVER, British Columbia, July 06, 2023 (GLOBE NEWSWIRE) — Harbourfront Wealth Management Inc. (“Harbourfront” or the “Company”), a national leading
Eat & Beyond’s Portfolio Company, Purpose ESG, Announces Strategic Partnership with ClimateDoor
Finance

Eat & Beyond’s Portfolio Company, Purpose ESG, Announces Strategic Partnership with ClimateDoor

Expands Purpose ESG’s strategic partnership into CO2 abatement advisory and government funding services Areas of collaborations include deal sourcing, secure