- UK's energy regulator Ofgem has hiked the energy price cap by 80% to £3,549, effective from 1 October.
- Energy bills will sharply rise in October, increasing the risk of more households being pushed into fuel poverty.
The financial problems of millions of UK households are set to rise as the country's energy regulator Ofgem has raised the energy price cap -- the maximum amount companies can charge per kWh of gas and electricity from domestic consumers -- by 80% of the current levels.
The latest hike puts the new cap at £3,549, which comes into effect from 1 October. This means that winter energy bills will triple from last year. Citing the high levels of global gas prices due to the Russia-Ukraine crisis, the regulator added that consumers will now have to make difficult decisions.
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Energy bills will see a sharp rise in October, and according to the Office for National Statistics, the winter energy bills will be over 11% of an average household income. This indicates that many Brits risk being pushed into fuel poverty.
It may be noted that the energy price cap isn't the maximum amount that anyone will pay. In fact, the cap is set on the rates for a unit of gas or power used. Ofgem revises the cap every three months, and the next revision is scheduled to come into effect from January 2023.
Let's look at some London-listed energy stocks and how they reacted to the development.
National Grid Plc (LON: NG.)
Shares of the energy utility company were trading 0.13% lower at GBX 1,134.50 as of 10:08 am GMT+1 on Friday. The firm plans to reduce power demand during winters, which also includes rewarding households and businesses for using less electricity. The FTSE 100 constituent has given investors a return of 19.31% over the past year, while the year-to-date return stands at 7.00%. The stock's Relative Strength Indicator (RSI) stood at 38.80 as of 10:09 am.
SSE Plc (LON: SSE)
SSE is another leading energy utility firm in the UK. It is engaged in generating both renewable and non-renewable electricity. Holding a market cap of £19,458.61 million, the company has provided a return of 10.91% to investors over the past year. Its earnings per share (EPS) are 2.87. With an RSI value of 49.57, shares of the company were up 0.14% at GBX 1,825.00 as of 10:16 am GMT+1 on Friday.
Centrica Plc (LON: CNA)
Centrica is another energy utility firm listed on the FTSE 100 index. Its shares were up 1.28% and traded at GBX 82.48 as of 10:18 am GMT+1 on 26 August. The stock has provided decent returns of over 61% to investors over the past year. Its year-to-date returns are 15.36%, and the EPS stands at 0.21. With a market cap of £4,811.16 million, the RSI value of Centrica was at 53.86 at 10:20 am.
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