The energy costs for most households across the UK are set to increase, with an average rise of £21 leading to total annual bills of £1,738 starting in January, intensifying the financial burden on millions of families.

Ofgem, the energy regulatory body, has adjusted the price cap upwards by 1 percent, raising it from £1,717 in the previous quarter. This change is a response to a resurgence in wholesale gas prices, which have been influenced by escalating global political tensions and severe weather phenomena.

This marks the second increase during the current winter season, although it is less steep than the 10 percent hike seen in October.

The current price cap means that the average dual-fuel bill is now approximately 50 percent higher than it was before the crisis began, when the typical cap was around £1,100 per year.

This weekend, the UK is bracing for severe weather, including heavy rain, strong winds, and potentially disruptive snowfall as the second storm of the year, named Bert, approaches.

Tim Jarvis, Ofgem’s director-general of markets, commented, “While the latest revision indicates a relatively stable cap, we recognize that energy expenses continue to pose difficulties for numerous households.

“Nevertheless, as new tariffs become available, consumers have opportunities to reduce their bills by exploring all available options and comparing providers.”

The energy price cap, established by the government in 2019, serves to limit what suppliers can charge consumers for gas and electricity under standard tariffs. This measure was created to safeguard consumers and undergoes regular updates, reflecting the costs that an efficient supplier should incur, as assessed by the regulator.

European gas prices have surged to a 12-month high, trading at €48.7 per megawatt hour, up from a 30-month low of €24 per MWh in February. This hike in prices is attributed to increased demand in Asia following unprecedented summer heatwaves, which has intensified the competition for gas supplies on the international stage.

In light of the war in Ukraine, Britain has increased its dependency on liquefied natural gas imports in an effort to reduce reliance on Russian pipeline gas, a situation that Ofgem warned is likely to result in ongoing price volatility throughout the next year.

Forecasts from Cornwall Insights, an energy consultancy, suggest that the price cap could drop slightly over the course of next year, with expectations of a decrease to £1,713 in April and further reductions in July.

The winter price hike is expected to exert additional pressure on millions of Britons who have already been struggling to manage escalating energy costs. According to Ofgem’s most recent data, bad debts—which are deemed unlikely to be recovered—have reached a staggering £3.7 billion.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, voiced concerns, stating, “With falling temperatures, another winter of the energy bills crisis weighs heavily on people’s minds.

“Ofgem’s decision to adjust the price cap mid-winter was criticized as inhumane back in 2022, and it has faced opposition from campaigners ever since, as families find themselves needing to allocate more funds to stay warm during this challenging time.”

Energy Secretary Ed Miliband expressed that the rise would “raise concerns for families dealing with the cost of living” and assured that the government would “do everything possible to support individuals.”“

However, the government has faced backlash for eliminating the winter fuel allowance for pensioners not receiving pension credit or other means-tested benefits, a decision expected to affect approximately 10 million retirees.

The price cap determined by Ofgem for the upcoming October quarter accounts for a daily standing charge of 60.97p for electricity and 31.65p for gas, a slight decrease from the previous quarter’s charges of 60.99p and 31.66p, respectively.