Campaigners have called on the UK government to freeze household energy costs beyond the end of March as falling wholesale prices sharply reduce the amount of government subsidy needed to hold bills steady.

The average UK household bill is set to rise to £3,000 per year between April and June under the energy price guarantee scheme, up from £2,500 today, as chancellor Jeremy Hunt has argued that the government cannot afford to keep subsidising bills at the lower level.

Households face even steeper increases as the government’s energy bill support scheme, which shaved an additional £400 off every household payment, is set to end.

But the latest forecasts for UK household energy costs show the regulator’s price cap — which sets the unsubsidised price of energy for the majority of homes — will not rise as much as previously feared, reaching around £3,300 in April and dropping below £2,200 from June.

Late last year it was predicted that it would rise well above £4,000 as energy prices soared.

Cornwall Insight, a consultancy, estimated on Monday that the additional cost to the government of freezing bills at £2,500 between April and June would be £2.6bn, or less than 10 per cent of the total cost of the EPG that has been in place since October.

Read more about UK household energy bills here.

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