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25 May 2023

Energy price cap drop is a big relief for consumers and employees but firms want to see long-term strategy now, says Chamber

Commenting on Ofgem’s announcement that the energy price cap on household bills will fall to an annual average of £2,074 between July and September, East Midlands Chamber chief executive Scott Knowles said: “Given that rocketing energy prices over the past 18 months have been the main driver of rampant inflation – which has in turn caused the simultaneous crises in the cost of living and cost of doing business – the reduction in the energy price cap will be welcomed by consumers and firms alike.

“This follows hot on the heels of both the headline and input inflation rates dropping to the lowest figures in many months, providing more good news for businesses.

“While companies will benefit because this positively affects their end customers and employees, we should remember this only affects households, with businesses subject to a separate scheme that provides a discount on wholesale prices until March 2024.

“The value of this support reduced by 85% compared to the previous Energy Bills Relief Scheme, so firms will desperately hope that wholesale prices continue to drop otherwise they will continue to face major cost pressures, particularly those in energy-intensive industries.

“Going forward, we need to see a long-term national strategy on energy security that incentivises businesses to integrate low-carbon energy sources within their operations – which is all about ‘growing our competitiveness the right way’, as we describe this in our East Midlands Business Manifesto for Growth, A Centre of Trading Excellence.”