Analysis: The brutal recall cost crisis will get worse before it gets better

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With days to go before voters head to the polls, tens of thousands of them have received a stark reminder that the cost of living crisis will get worse before it gets better.

The 33% and 27% hikes in SSE Airtricity and Budget Energy will see the average household electricity customer paying over £1,000 a year to power their home.

In the case of Budget Energy, which has 90,000 customers, the Consumer Council says the average annual bill will be closer to £1,400.

Fifteen years ago a household in the North might have expected to pay less than £400 a year for electricity.

For suppliers, the song remains the same. The wholesale price of natural gas, which accounts for a large portion of electricity prices, has surged since last year, with an extremely volatile market.

Gas prices in Europe soared again this week after Russia cut off supplies to Poland and Bulgaria.

Consumer watchdogs have warned us to prepare for a few years of high energy prices.

The price of heating oil, used by two-thirds of homes in the North, has also risen in the past two weeks.

From what the Consumer Council tells us that the average family consumes in a year, an annual oil bill could be between £2,220 and £2,500 at today’s prices.

Coupled with the latest electricity hikes, this could see many households in Northern Ireland facing annual energy bills in excess of £3,000, possibly even £4,000.

For context, the cap on energy prices in Britain (even after the last hike) is around £2,000.

As Thursday’s poll approaches, political parties have pledged new energy support payments to help households get by.

This may help some in the short term. But with UK inflation set to hit 9% this year and prices steadily climbing, consumer confidence will suffer.

The growing consensus is that we could be heading for another recession in the not too distant future.

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