YET another blow has been dealt to households with the announcement of the energy price cap and interest rates being increased.

With the cost of living crisis already hitting some hard, the latest announcements led to the Bank of England warning, families are about to see the worst drop in living standards since comparable records began three decades ago.

The energy price cap was introduced in 2019 by the regulator OFGEM, in a bid to protect consumers from spiralling bills. However, from April the cap will increase by 54%, meaning average bills will rise by £693.

The reason for this increase in the price cap, is put down to record increases in global gas prices. The changes in the price cap will take effect from April and are reviewed every six months. However, OFGEM plans to change this and review every three months.

Forecasters are already predicting another rise in October. The government has announced plans to take the pressure off some households, but the increase in costs for the consumer is hard to stomach when energy companies are reporting vast profits.

The ‘big six’ UK energy companies have raked in over £1 billion in profit, ahead of the price increases. Energy company SSE reported £600million profit, before taxes. Last month, the Scottish energy company was forced to apologise for advising customers to ‘do star jumps’ to keep their energy bills down. On the same day as the announcement on energy prices, Shell announced a quadrupling in profits with the company forecast to have made £13.5 billion in profits in 2021.

The boss of BP Bernard Looney is also on the record saying the company is like a ‘cash machine’.

As usual, great news for the energy giants, but misery for the rest of us.

The energy bills rebate revealed by the government which will provide around 28 million households with an upfront discount on their bills worth £200, does not nothing to help when the cost of living is beginning to spiral out of control. In fact the £9.1 billion will go straight to energy companies, who will continue to pay out big bonuses to shareholders and CEO’s. To make matters worse this rebate will then need to be paid back by consumers, in £40 instalments over five years, starting from 2023. Other governments across Europe are taking action to ease the crisis.

In France for example the government is limiting rises to 4% and forcing energy company EDF to take a £7billion financial hit to protect consumers.

Spain has introduced a windfall tax on electricity and gas generators, who are set to make big profits from rising prices.

The massive profits which are being recorded by energy companies, make the case for a windfall tax on their profits, or nationalisation more relevant than ever.

Other countries have done just this. With the cost of everything increasing and wages not increasing at the same rate, the cost of living crisis just gets worse.