Octopus Energy: Bills will fall in April, says boss

The boss of Octopus Energy says bills will fall this April as providers have already paid for the gas.

Speaking to the BBC at the World Economic Forum in Davos, chief executive Greg Jackson said the new energy price cap will be "hundreds of pounds lower" than current levels.

He added that gas supplies had been secured in advance of the winter months.

This has led to lower wholesale prices, Mr Jackson said.

His comments come as millions are set to see bills rise, with January statements reflecting the current price cap, which came into force at the start of the month.

The energy price cap limits how much suppliers can charge households for each unit of energy they use.

Energy regulator Ofgem said the typical dual-fuel annual household bill would go up from £1,834 to £1,928 in January, a rise of £94.

A mild winter has also helped European gas storage levels to stay above expectations.

According to forecasts from research firm Cornwall Insights, annual energy bills for a typical household will fall by £268 in April to £1,660 as a result of lower wholesale prices.

When asked about the possible impact of tensions along the crucial Red Sea route, Mr Jackson said there were many reasons to worry about tensions and "huge issues in the world" but was still confident prices will be lower.

"The energy we're buying right now for the next few months, is coming in as the among the cheapest it's been for the last few years, so of course there are so many problems in the world, but certainly in the short term energy prices look like they're actually going to be coming down and stabilising."

Oil prices jumped by 4% after the US and UK launched strikes in Yemen over recent attacks by Houthi rebels on ships in the Red Sea.

Brent crude hit $80 (£63) per barrel for the first time this year as the Iran-backed rebels vowed to retaliate against military action by Western powers.

While the price rose, it is below highs reached when Russia invaded Ukraine.

The UK government is concerned that ongoing attacks on shipping in the Red Sea could weigh on the UK economy, where growth remains fragile.

Higher energy prices risk stoking inflation just as it has begun to slow. Meanwhile, the cost of shipping containers on vessels has jumped, meaning that companies could choose to pass on this expense to consumers.

Prime Minister Rishi Sunak said that the attacks had caused "major disruption to a vital trade route and [higher] commodity prices".