It has been a very long time since my last far reaching email. But with energy prices remaining steady for many months, there is not much point in me emailing you to tell you nothing has changed!
There now is change! Over the past couple of days Cornwall Insight has unveiled its final forecast for the January to March 2024 price cap . They are projecting that we will see the domestic price cap increasing in January, the first increase in 12 months (the official cap announcement by Ofgem is scheduled this week). I thought it right to explain what this means to you guys.
It is important to note that domestic and business energy both buy from the international wholesale energy market. However, when the energy is sold to us, business and domestic are very different. The two main differences, for the purpose of this article at least, is firstly, domestic energy has a price cap and business energy does not and secondly the domestic price cap can only be changed every three months, next time will of course be January. Thereafter it will not be changed again until April 2024. Business energy prices however can and do change daily. Eon Next, for example, release a daily price at around 09:30 that is removed at 15:00, others, like BG Lite remove prices at 12:00 Friday and come back online, Monday morning. This means that business energy is more sensitive to change. Although the rise and fall of the price cap is different from business energy when forecasting what we expect to happen, the domestic price can sometimes be a good indicator of the future.
Now, I invite you to consider that if the projections are correct, logically thinking that must mean that the incremental changes we can expect to see in business energy ….will be increases. I have seen evidence of this, the last few price changes have all been small, but definite increases.
My advice is to use this knowledge to your advantage. The writing is now on the wall, increases are coming. If your contracts are ending between now and May 24 there really is no sense in waiting it out anymore.
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