💷 Martin Lewis issues ‘NOT GREAT’ warning ahead of feared energy price cap surge

Martin Lewis has given advice on how consumers can protect themselves from surging energy costs caused by the war in Iran. It was announced today (Wednesday, May 20) that inflation had fallen to its lowest level in more than a year in some surprising good news for Brits.

Consumer Prices Index inflation fell to 2.8 per cent in April, down from 3.3 per cent in March as a drop in energy prices offset soaring fuel costs.

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A combination of Ofgem lowering its energy price cap by 7 per cent for the average household using both electricity and gas, and Government measures to reduce bills, is thought to be behind the drop.

However, it came with a warning that the price cap is likely to rise when it is updated in July, as the US-Israeli strikes on Iran have seen energy costs skyrocket.

Speaking on Good Morning Britain about the situation, Mr Lewis said: “The assessment date for the energy price cap closed. The July price cap closed on Monday and it’s looking like it will go up 13 per cent for the July to October price cap.

“The real question is what happens in October and what happens in January, and currently that’s looking to have prices at the same level, and that’s what will hurt things.

“Now, if the Middle East crisis were to end soon, we might see those prices not be as high. They’ll still be higher than they are right now, I would think, but not be as high.

“The solutions aren’t great, but you can get onto comparison sites right now and get a fixed rate that’s the same rate as the current price cap. So, you can lock in here, and prices are going to go up 13 per cent and then probably stay somewhere out here for the next year.

“So, if you can lock in, while you won’t save much right now if you’re fixing at about the current price cap, from July you will start to save, and you can act to prevent those price rises. Don’t stick with your own company because there are very few cheap fixes out there. You need to go whole of market on a comparison site.”

Chancellor Rachel Reeves is expected to outline a package of cost-of-living support this week in response, with Sir Keir Starmer confirming today that the 5p fuel duty increase has been postponed for the rest of the year.

Ms Reeves said: “The war in Iran is not our war but one we will need to respond to, and the decisions I took in the budget last year have kept inflation down as we deal with global instability.

“We have the right economic plan, and to change course now would risk our economic stability and leave working people worse off.

“We have already taken £117 off energy bills, frozen rail fares, and lifted the two-child limit, and over today and tomorrow, I’ll set out the next phase of how we will support UK households.”

Speaking in response to the predicted 13 per cent rise forecast for July to October, Mr Lewis continued: “Just to mitigate that slightly, it’s important to say that (the price cap) lasts three months and it (July to October) is the lowest use period of the year.

“We use about 15 per cent of our energy in that quarter of a year. So, in practical terms, for someone who pays £150 a month on energy, the total increase due to that energy price cap rise will be about 30 to 40 quid. I just need to, you know, say it’s not great, but it’s not catastrophic.”