Households are expected to see energy bills rise from January as industry regulator Ofgem is set to announce a new energy price cap on Thursday, November 23.

Current predictions from experts at Cornwall Insight have predicted a five per cent jump in energy bills. The experts have suggested electricity will increase to 28.94p per unit while gas will rise to 7.42p per unit from January.

Ofgem will make its decision on Thursday morning, with an announcement expected at around 7am. The new price cap will be in place from January 1 to March 1.

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Cornwall Insight has predicted that the rise will see energy bills rise from the current price cap of £1,834 per year for the average household to £1,931 at the start of the year. However, the long-term forecast from the experts predicts bills will then fall again to £1,853 from April.

Bills aren't expected to drop below current levels until July next year, but, this prediction is subject to change due to how far ahead in the future it is. Dr Craig Lowrey, principal consultant at Cornwall Insight, said: "An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels.

"This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between."

He added: “The King’s Speech acknowledged that it is our exposure to volatile international energy markets that has led to higher and less predictable bills. While we continue to advocate for immediate targeted support for vulnerable consumers, it is evident that the only enduring solution lies in transitioning the UK away from the influence of global energy prices towards sustainable, domestically-sourced energy."

The prediction comes despite the fact that inflation dropped to 4.6 per cent in October which economists said was mainly driven by the lower energy price cap. Meanwhile, wholesale prices are expected to increase by around 5 per cent, or £100, in the first half of 2024, before dipping slightly, according to a research brief from the House of Commons Library.