Britons face higher energy bills despite cooler inflation

UK regulators announced Monday a lower cap on sky-high energy bills from April but Britons still face paying more for gas and electricity as the government reduces financial assistance.

The energy regulator Ofgem said the annual amount suppliers are able to charge an average household would be slashed by nearly a quarter, to £3,280 ($3,925) from £4,279.

"The price cap is coming down, but not by enough to help people who will face a sharp spike in their energy bills in April when the government" reduces its financial help, noted Rocio Concha, director of policy and advocacy at the consumer pressure group Which?

Market energy costs have slumped in recent months on easing supply concerns.

Following the invasion of Ukraine by major oil and gas producer Russia one year ago, which sent energy prices and wider inflation soaring, governments have scrambled to shore up supplies while subsidising domestic bills.

Annual UK inflation has cooled in recent months but remains above 10 percent, fives times the rate targeted by the Bank of England.

Soaring energy and food bills, coupled with rising interest rates by the central bank aimed at cooling inflation, have eaten into the disposable income of millions of Britons.

The cost-of-living crisis has triggered the biggest UK strike action in more than a decade.

"Ofgem's latest manoeuvres on the energy price cap do next to nothing to ease the pressure on workers and communities already haunted by... their fuel bills," Sharon Graham, general secretary of major British union Unite, said Monday.

"This out-of-touch government is clearly preparing to pull the plug on protecting consumers and is totally abdicating any responsibility for dealing with the runaway profiteering of energy companies," she said.

The Conservative government of Prime Minister Rishi Sunak is resisting calls to offer inflation-matching pay rises for public-sector workers, notably thousands of nurses and teachers who are planning more strikes next month.

The government argues that it needs to slash debt after the state provided massive financial assistance during the height of the Covid pandemic, subsidising wages to keep millions of people in work.