Energy prices are coming down, but they should be cheaper

It is hard to remember that this time last year soon-to-be prime minister Liz Truss was on the verge of compromising her free market principles by dreaming up a scheme for the state to make an open-ended commitment to subsidise the energy bills of every household in Britain. At the time, there were dire predictions that households would be swamped by energy costs, forecasts for which were rising by the day.

This morning, Ofgem has announced that the Energy Price Cap is to fall again, to a level at which the average household will see energy bills of £1,923 a year, down from £2,074 a year at present. The move won’t take prices below the level they were before the invasion of Ukraine in February 2022, but it will take them just below the level they were later that spring.