Energy bills will hit £6,600 a year in spring, warns Cornwall Insight

Figures suggest government support for households will need to last until next year amid growing pressure for the new prime minister to present a new multibillion-pound package.

The April projection would mark a tripling of the current price cap and be 86% higher than the new October limit revealed by Ofgem on Friday. The cap is then expected to drop to just below £6,000 over the rest of 2023, but would remain at painfully high levels not seen before the war in Ukraine.

Craig Lowrey, an analyst at Cornwall Insight, warned that the energy crisis “shows no signs of abating”, adding that the price cap was “created for a different energy market than the one we face”.

He said: “Today should be seen as a wake-up call to policy makers that short-term thinking and triage of the energy system is not enough. Without real change in the energy system of this country, consumers, suppliers and the economy will all continue to suffer the consequences.

Wholesale gas prices have surged again in recent weeks to new highs of over 700p per therm, from just over 100p a year ago. The Kremlin has rattled energy markets by cutting gas supplies to Europe as leaders scramble to secure alternative supplies ahead of a gloomy winter.

The Resolution Foundation said households should prepare for their monthly energy bill to climb to £500 this winter. Families using prepayment meters could see their energy costs exceed more than £700 in January alone, more than half of their disposable monthly income.

Torsten Bell, head of the Resolution Foundation, has warned that Britain is on track for a “winter disaster unless significant help is provided”.

He said: “The benefit system has a crucial role to play this winter, but the scale of the crisis means that combining this with more radical approaches now seems almost inevitable. Big bill cuts combined with solidarity taxes, or throwing the kitchen sink on a whole new social tariff system, should be the focus of whoever becomes the next prime minister.