Fuse Energy offers a 15-month fixed energy tariff at £1,545 annually, saving average direct debit households £118 against the current Ofgem price cap. The deal carries exit fees of £50 per fuel and leads a market where fixed energy tariffs can protect consumers against price cap rises and volatility driven by conflict in the Middle East.
Comparison website Uswitch reported that energy suppliers and market analysts forecast the October price cap could rise by as much as 7 per cent. This comes after the energy price cap fell in April for average households but increased 13 per cent on July 1.
Current price cap rates and average consumption
On July 1, energy regulator Ofgem updated its average energy consumption figures to reflect lower household energy usage. Under these updated figures, the price cap for a typical direct debit household is listed at £1,663 annually, down from the £1,862 previously announced under old consumption figures.
The price cap does not limit a household's total annual bill because energy companies charge per kilowatt hour (kWh). From July, energy unit costs are set at 26.11p per kWh for electricity and 7.33p per kWh for gas, with daily standing charges of 57.19p and 29.04p respectively.
Government measures introduced in April removed certain levies to lower overall energy bills. In addition, a government VAT cut on electricity bills aims to provide relief over winter alongside fixed rates.
October price cap forecasts and analyst predictions
Sabrina Hoque, an energy expert from Uswitch, commented: "Every forecast we're seeing points to a more expensive October than last winter - it's just a question of how much more."
"The VAT cut is welcome and will provide some relief over winter, but it only applies to electricity, and it's modest next to what suppliers are predicting for the price cap. It's not a reason to stay put, as the bigger saving is still in switching to a fixed deal," Hoque added.
Supplier predictions indicate shifting forecasts for autumn energy costs. EDF Energy predicts the price cap will rise to £1,711 in October, which is a £49 decrease from its prediction the previous week, though EDF Energy stated its confidence in the prediction is "very low."
Energy market analyst Cornwall Insight predicted from July 21 figures that the October cap will reach £1,700. Both market analysts and suppliers note that unpredictable international events and political tensions heavily influence pricing forecasts.
Return of fixed deals after energy crisis
More than 20 fixed-rate tariffs are currently available to consumers after suppliers previously pulled deals following escalating conflict in the Middle East. Prior to the energy crunch in late 2021, standard advice encouraged households to switch providers regularly to secure cheap fixed-rate tariffs.
Affordable fixed-rate deals vanished in autumn 2021 as wholesale energy prices began rising across the market. Comparison sites paused switching services, suppliers stopped taking on new customers, and advice shifted to remaining on variable deals subject to the Ofgem cap, leaving 22 million households on variable-rate deals.
Evaluating fixed tariffs and exit fees
Fixed tariffs lock unit costs and standing charges for the contract duration, helping consumers budget. While total bills fluctuate based on actual energy usage, providers cannot increase unit rates or standing charges while a customer is on a fixed tariff.
Uswitch recommends checking unit rates per kWh on new fixed tariffs against existing deals and considering regional price variations. Consumers can compare tariffs across comparison sites and direct provider platforms, or sign up through Uswitch.
Households considering a switch must evaluate price trends across the entire contract length and account for exit fees. Early exit fees, such as the £50 per fuel fee charged by Fuse Energy, apply if cheaper fixed tariffs return and consumers decide to switch again.
