It’s a prediction, but based on a known algorithm and data publicly available covering the past five months. August’s wholesale prices will affect the final price cap, but it’s a fairly accurate prediction and I wouldn’t expect it to be far off.
Why? The projections for 2023 were nowhere near as bad as they now are a year ago.
All of the projections are foggier and foggier the further they look forward.
A year ago they were working on projections, and the wholesale prices hadn’t rocketed the way they since have. October’s price cap increase will be based on wholesale prices in the six months up to September 2022, so most of the figures that get fed into the algorithm are already known.
Remember the estimated prices being talked about are all based on a specific average kWh usage that ofgem use.
You should base the numbers on a multiplier of the actual kWh usage. Not the difference in your bill vs what the media say it’s going to be. It’s probably less for most people
A year ago we were working on projections for what was then 18 months in the future. The same is true now for 18 months in the future. It’s correct to point out that the rocket in wholesale rates and the war in Ukraine was not factored in to those predictions, but then neither are whatever events occur over the next 12 months which you or I or the algorithm don’t know about.
Last summer’s 18 month predictions are just as foggy as this summer’s.
Oh I know that. That’s why I’m not worried.
Many others may not understand that.