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.
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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.
Energy price cap announced for October - £3,549 for a typical household 
The government has to announce what support it is going to provide. Staying silent on the issue and leaving vulnerable people worried sick is a disgrace.
Octopus, along with a couple of other energy companies, has put forward a plan that would see prices frozen for the next 2-4 years.
Well, three hours after the announcement and Octopus have not changed the offered Loyalty Fixed Tariff rate yet.
The rates are still way above this price cap anyway, so I’ll be sticking with the Price Cap Tariff and riding this out.
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Have you considered Octopus Tracker July 2022 v1?
Tracker follows the wholesale price but Octopus impose their own cap of 55p/kWh for electricity and 16p/kWh for gas. They have always honoured this cap for each version of Tracker in the past. The tariff price changes daily in line with the wholesale market but, given the market at the moment, it’s effectively going to be 16p/55p for the foreseeable future.
You don’t need smart meters for this tariff, incidentally, and if Octopus do change their own cap on Tracker and it becomes more expensive than Flexible, you can switch back without penalty. Ditto if the government suddenly intervene and freeze the Ofgem cap.
I’ve just switch my mother to this as her energy usage over winter is around twice the “average” household.
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That’s a good shout. I’m in a fixed tariff at the moment so I’m not hugely worried yet but I think soon it will be for me. I’ve been happy with Octopus. They have always been transparent about everything going on.
We’ve inadvertently drifted away from Octopus Energy. May need some tidying on the morrow.
This could be why my fixed tariff options have not changed yet.
Pleasing, in one respect, as no knee-jerk reaction, however, I am still not going to fix at the rates offered atm.
The links in the graphic:
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What they have done is raise their own caps on their new incarnations of Agile and Tracker to 78p/kWh for electricity and 22p/kWh for gas.
Anybody who enquired about those tariffs before 4pm on the 29th August will have the previous caps honoured for 12 months, though.
Suspect this is really them not announcing something which is redundant next Monday.
Or chicken with government too by racking up heavier losses?!
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Equally plausible. What strange times we live in.
It’s what I’d be doing, if I were any of the big 6. The government should have (as I said at the time) bailed out all of the smaller providers instead of moving people around.
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Cease and decist from Nintendo incoming…