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Energy price cap will rise in January

Energy regulator Ofgem said the typical annual household bill would go up from £1,834 to £1,928, a rise of £94 or 5%. It said the rise in bills would be "worrying" at a difficult time for many people, but was the result of higher wholesale costs faced by suppliers. Analysts have predicted that prices will fall back in March. The announcement comes the day after Chancellor Jeremy Hunt delivered his Autumn Statement. The regulator's price cap affects 29 million households in England, Wales and Scotland. Rules are different in Northern Ireland. Ofgem sets the maximum amount that suppliers can charge for each unit of gas and electricity but not the total bill, so if you use more, you will pay more. Specifically, the price of gas will be 7p per kilowatt hour (kWh), and electricity will 29p per kWh. "It is important that customers are supported and we have made clear to suppliers that we expect them to identify and offer help to those who are struggling with bills," said Jonathan Brearley, chief executive of Ofgem.

Dr Craig Lowrey, principal consultant at energy analysts Cornwall Insight, said: "Amid the cost-of-living crisis, the last thing households need is a rise in energy bills - especially going into the winter months.  "However, as is often the case in the energy market, new challenges have arisen, and our reliance on foreign energy has once again left the UK vulnerable to price increases caused by events around the globe." For customers such as Roy Bridgewood, a rise in prices will add extra pressure on to the financial difficulties he is already struggling to cope with. 

Mr Bridgewood, from Manchester, is about £1,400 in debt on his gas and electricity bills.  "The last payment I made on the gas was about £800. It was every penny I had left in my savings," he said. He has been out of work for a year and has two teenage children at home. "I'm struggling to get work, struggling to pay bills and struggling to live. You feel vulnerable," he said. Experts say he is sensibly trying to pay what he can, and is being open with his supplier.

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