Energy bills will continue to rise for at least the next four years, a group of leading economists warned today.  

The Centre for Economics and Business Research has predicted that household finances will be strangled until 2026 in more grim news for millions of Britons who face a ‘tsunami’ of more expensive bills.

Douglas McWilliams, deputy chairman of the Cebr, said: ‘People can put up with high costs if only for a short period, but what our model suggests is, unless the Ukraine situation resolves itself, prices are likely to be high but falling for three or four years.’ 

Mr McWilliams believe that it will not change at all until Britain gets a grip on its energy security, particularly for gas.

‘It is a tough scenario for people to live with,’ he told the Daily Telegraph, adding: ‘They are going to have to get used to higher prices. They are going to have to learn to economise.’

The Cepr believes that a therm of gas, that spiked at 800p after Russia’s invasion of Ukraine, will drop to an average of 180p by the end of the year. It will then drop to 160p in 2023 and 2024, down 10p to 150p in 2025 and then down to 118p in 2026. 

Households’ sky-high energy costs could reach nearly £400 for gas and electricity in a single month next winter, experts have warned.

The Centre for Economics and Business Research has predicted that gas prices per therm (pictured) will drop in the next four years but remain exceptionally high

The Centre for Economics and Business Research has predicted that gas prices per therm (pictured) will drop in the next four years but remain exceptionally high

The price cap for a duel is now at just under £2,000 - up £700 since October. Some experts predict another £600 could be added next October

The price cap for a duel is now at just under £2,000 – up £700 since October. Some experts predict another £600 could be added next October

Around 22million homes saw their gas and electricity bills increase by 54 per cent as the new price cap came into force last week.

Price of dairy products set to SOAR: Four pints of milk to increase by 50% from £1.15 to £1.70 while pack of butter will rise from £1.55 to £2 

The price of milk is to rise by 50 per cent and butter by 30 per cent amid a worsening cost of living crisis, it has been claimed.

Industry bosses fear that surging costs from feed, fertiliser and fuel will cause an increase in prices not seen in decades.

It comes as dairy farmers flew into Brussels last week for crisis talks over soaring costs and supply chain disruption.

The cost of four pints of milk will rise from around £1.15 to between £1.60 and £1.70, according to the UK’s leading adviser to dairy farmers Kite Consulting. 

Meanwhile a typical pack of butter could increase from £1.55 to more than £2. The war in Ukraine is also said to be impacting prices.

Michael Oakes, the dairy board chair of the National Farmers’ Union, told the Daily Telegraph: ‘I was paying about £7,000 for an artic [articulated lorry] load of fertiliser, and this year it’s £28,000. 

‘It would have been a little bit less before Ukraine happened, but it made another big jump because we’d already seen higher gas prices, which have implications for fertiliser costs.’

UK dairy bosses have raised concerns over their costs to the Government but the Department for Environment, Food and Rural Affairs (Defra) is said to be only in ‘listening mode’.

The rise, which came as temperatures fell below freezing again, will add nearly £700 to the average annual bill as the nation battles a cost of living crisis.

But many customers say suppliers have hiked their direct debit payments by even more than this – with some demands doubling.

Government economists have forecast that the Ukraine crisis and soaring cost of wholesale energy means the price cap will have to rise another 42 per cent in October to reach £2,800 for the average household. 

It means those living solely off the state pension could see their income obliterated by heating costs.

Comparison site The Energy Shop said heating and powering the average home will cost £1,859 between October and March – peaking at £395 in January when temperatures hit their lowest.  

Several supplier websites crashed on Thursday as customers rushed to submit meter readings before prices rocketed.

The price cap stood at £1,138 for the average family last year but was lifted to £1,277 in October. 

If it is hiked again to £2,800 in October, as predicted by the Office for Budget Responsibility last week, older households will be forced to put most of their state pension towards heating.  

Onshore wind farms will not be forced on rural areas in England despite a drive to expand domestic energy generation, the Government has said.

Ministers are leaving the door open to relaxing planning laws that have largely prevented their development since 2015 – but communities must consent to them.

It means new sites will likely be confined to Scotland, Wales and Northern Ireland, where planning rules are less restrictive.

Boris Johnson also wants more offshore wind and is said to have called for a ‘colossal wind farm you can float out into the middle of the Irish Sea’.

The Prime Minister is expected to finally unveil his delayed energy security strategy on Thursday after weeks of wrangling over the cost of a massive push for nuclear.

Up to seven new nuclear power stations could be built by 2050 as part of the Government’s ambition to reduce Britain’s reliance on the international energy market following Russia’s invasion of Ukraine.

Business Secretary Kwasi Kwarteng said the UK should ‘aspire’ to nuclear making up a quarter of the energy generation mix.

‘But obviously, you’re not going to suddenly have six new nuclear stations in the first three years.

‘I mean, it’s physically impossible to do that,’ he told the Sunday Telegraph.

A record rise in energy bills kicks off a year of economic pain for millions

A record rise in energy bills kicks off a year of economic pain for millions

The OBR has warned that families face the worst squeeze on living standards since records began in the 1950s this year

The OBR has warned that families face the worst squeeze on living standards since records began in the 1950s this year

Eco-mob block oil depot for FOURTH day in row: Extinction Rebellion set up bamboo barricades outside Esso site near Heathrow 

A group of 30 environmental activists blockade the Esso West London Oil Terminal near Heathrow Airport this morning

A group of 30 environmental activists blockade the Esso West London Oil Terminal near Heathrow Airport this morning

Environmental protesters from Extinction Rebellion and Just Stop Oil caused mayhem for the fourth day in a row this morning as a group of 30 blockaded an oil terminal in London with two bamboo structures.

The demonstrators gathered outside the Esso West London Oil Terminal near Heathrow Airport from the early hours of today as they continued to urge the Government to ‘stop all new fossil fuel investments immediately’.

The activists, who first gathered at 4am, used two large banners which said ‘Stop Fossil Fuels Now’ and ‘Join Us: London 9th April’ – the latter referring to their planned protests starting at London’s Hyde Park from this Saturday. 

Activists have been blocking access to oil terminals over the last three days in the likes of London, Birmingham, Southampton, Grays in Essex and Tamworth in Staffordshire – with more than 200 people arrested so far. 

It comes as UK motorists continue to suffer at the pumps with petrol prices hitting record levels in recent weeks after Brent crude oil hit a high of $128 last month – up from lows of $19 seen at the peak of the pandemic. 

Warwickshire Police said the force has so far made 54 arrests for offences including criminal damage, obstructing the highway and public order in relation to a protest at Kingsbury Oil Terminal near Tamworth.

In Essex, officers arrested 155 people following protests in the Thurrock district around Grays and Purfleet. The force said 63 arrests were made on Friday, 57 on Saturday and a further 35 yesterday, for a variety of offences.

Ministers will also launch a development vehicle called Great British Nuclear to identify potential sites, cut through planning red tape and raise private finance for developments.

And Mr Kwarteng said onshore wind and fracking could form part of the energy mix as long as there is ‘community consent’.

He added: ‘We don’t live in a totalitarian country where the Government, the man or woman in Whitehall, can say ‘right, we’re going to do this’, without some large measure of consent from local communities.

‘And in both of those technologies, frankly, there has been considerable local opposition. That doesn’t mean to say we’re shutting the door on both, but it does mean that any movement has to have a large measure of local consent.’

But his Cabinet colleague Grant Shapps yesterday called onshore wind turbines an ‘eyesore’ and said he does not want to see a flurry of new ones.

The Transport Secretary told Sky’s Sophy Ridge on Sunday programme: ‘I don’t favour a vast increase in onshore wind farms, for pretty obvious reasons – they sit on the hills there and can create something of an eyesore for communities as well as actual problems of noise.

‘So I think for reasons of environmental protection, the way to go with this is largely, not entirely, but largely off-sea.’

He suggested nuclear and offshore wind would be more prominent in the energy strategy, adding: ‘I don’t think you want a huge expansion of onshore wind.’ But Labour’s business spokesman Jonathan Reynolds told LBC radio: ‘I would have no objection at all to living close to an onshore wind farm.’

Sources said last night that ministers had not yet finalised the strategy but that would be done early this week.

A Government spokesman said: ‘Next week we will set out an ambitious plan to supercharge our use of a diverse range of renewables, including offshore wind, solar and hydrogen, all underpinned by nuclear and continued support for our North Sea oil and gas sector. Any decisions on onshore wind will always be subject to consent from local communities.’

Labour was yesterday forced into a rapid U-turn after suggesting Britain should look at rationing energy supplies.

The party’s business spokesman Jonathan Reynolds said ministers should be making plans to ration oil and gas in response to Russia’s invasion of Ukraine. But he quickly reversed his position and admitted rationing energy would be a ‘disaster’.

Mr Reynolds initially told BBC 1’s Sunday Morning programme: ‘We should be making those plans and the Government should be preparing for that situation.

‘There’s a lot of complacency in this country about the relative lower exposure to Russian gas that we have. But we should bear in mind that part of the supply that comes to this country from, for instance, Norway or from the liquefied natural gas that goes into the terminals and wells, that is partly because Russian gas is fulfilling the demands of central Europe.

‘I think what the Government should announce is a plan which is not simply shopping from one authoritarian regime to the next for fossil fuels, but that long-term plan that would make the difference.’

But he swiftly carried out a U-turn, telling Times Radio an hour later that rationing energy ‘would be a disaster for households and for businesses’.

He then told LBC that Labour believes ‘a successful plan would absolutely mean we did not have to consider’ rationing energy. He said: ‘We should be making plans to make sure our energy supplies are secure, consistent with net-zero and delivered at the best possible price.

‘And what we have put forward would do that, but what the Government are yet to tell us is their plan to do that.’

Some European countries are considering rationing power after Russia demanded they pay for fuel with roubles or risk losing their supply. But Transport Secretary Grant Shapps ruled out such a move in Britain, telling the BBC: ‘It is not the route that we want to go down.’

Yesterday Kremlin spokesman Dmitry Peskov said the rouble payment scheme for natural gas was a prototype that will be extended to other major exports.

Hell for households: How much more YOU will be paying in bills from April 1 (and it’s no joke) 

British households are facing unprecedented rises to most of their monthly bills

British households are facing unprecedented rises to most of their monthly bills

Energy bills – up 54%, £693 a year

Annual energy bills soared by 54 per cent as regulator Ofgem raised the price cap for an average home to £1,971 from £1,277. Experts believe it will be £600 more from October. 

Petrol – up, 39%, £23 per tank

Fuel prices have surged to a record high of £1.66 a litre of petrol and £1.78 for diesel as it emerged that motorists have been hit by daily increases for six weeks. 

The cost of filling up a typical family car with a 55-litre tank is now £81.41, up from £58.56 in May 2020, when petrol prices plunged because of the first coronavirus lockdown. 

Council tax – up 3.5%, £67 a year, on average 

More than half of town halls will charge over £2,000 in average council tax bills this April. The typical Band D bill in England will be £1,966 – up 3.5 per cent on last year. The highest in the country will be in Rutland, where residents will receive bills of £2,300. The highest increase is in Sandwell in the West Midlands – up by 5.2 per cent. For the first time, more than half of local authorities will charge in excess of £2,000 for Band D households.

National insurance, up 1.25%

National insurance increases worth around £6billion are taking effect in a few days. 

For employees they would previously pay 12% on earnings up to £50,270 and 2% on anything above that. From April 6, the rate goes up to 13.25% and 3.25% respectively. For the self-employed, rates will go up from 9% and 2% to 10.25% and 3.25%.

Payments will only be collected on wages above £9,880, although this rises to £12,570 in July.

Water bills – up 1.7% – £7, a year

Water bills in England and Wales will rise by an average of 1.7% to £419. South West Water customers will pay £515. 

Broadband, phones and TV – £42 or more a year

Sky is hiking prices of broadband and TV channels by an extra £43 a year from April in a fresh cost of living blow. Families will need to fork out an additional £3.60 a month, Sky estimates, as it raises the costs across its services. 

Sky joins other broadband and TV providers such as Virgin Media, which is already set to hike prices by an average of 4% from March 1, 2022.

And BT, TalkTalk and Vodafone are increasing prices by as much as 9%.  

Vehicle excise duty – up 6%, between £10 and £30 a year

Tax on a band E car is increasing from £155 a year to £165.  The most polluting cars are subject to a £30 increase.

Pint of beer – up 5%, 20p each

A cut in VAT has ended meaning landlords say they must add 20p or more to the cost of a pint. To make ends meet they say that £7 a pint might be needed in some London pubs.

Lateral flow tests – £1 to £3 each

Britons will face paying up to £3 per lateral flow test from April 1, despite French supermarkets offering them for three-times cheaper. 

The Prime Minister scrapped ‘free’ lateral flow tests from today. People who opt to keep testing face spending £20 for a box of seven — around £3 per test. 

Total increase:  Up to £2,620-a-year per household

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