Twelve energy providers have pulled fixed-rate tariffs and replaced them with more expensive deals since June 23, in signs the pound’s fall in the wake of the Brexit vote could push up household bills.
Comparison website uSwitch found a dozen dual-fuel deals had been replaced since the referendum, with new offers costing up to £105 a year more for the average customer. It said wholesale energy costs had been rising for the past three months, and that the UK’s position as a net importer of energy meant the falling pound was pushing up prices.
uSwitch energy expert Tom Lyon told The Guardian for nearly three years, wholesale gas and electricity prices have been falling, leading to cheaper and cheaper fixed-term deals for consumers.
“But with concerns about future UK energy supply, the impact of Brexit, and a weaker pound, we are starting to see some suppliers increase the price of their cheapest deals,” he said.
Before the referendum, the government had claimed that a leave vote would push up prices for households. In March, the energy secretary, Amber Rudd, talked of an “electric shock”, with prices rising by £500m a year – or £20 for every household. However, leave campaigners suggested a Brexit vote would allow the government to scrap VAT on fuel, bringing down costs.
The new deals launched since the vote vary hugely in price. Utilita’s Premium Energy deal has fallen in price, by £31, but remains more expensive than some of those that have risen in cost, at £1136 a year for a typical energy user. British Gas’s HomeEnergy Fixed offer is just £25 a year more than the supplier’s previous version, but costs £1044.
The wholesale prices of gas and electricity fell during 2015 and winter saw providers cut their standard tariffs and launch low fixed-rate deals. There were still “some very competitive” deals on the market, said uSwitch, and the average price of the 10 cheapest deals on the market was £99, or 11 per cent, lower than in July 2015. It said that alongside one-year fixed-rate tariffs suppliers were also launching longer-term deals. First Utility, for example, has launched a three-year deal with a typical cost of £999 a year.