MILLIONS of households will continue to face “far too high” energy bills despite forecasts of a 7 per cent fall from July, campaigners have warned.

Experts at Cornwall Insight predict the typical household energy bill will drop by £129 to around £1,720 annually when Ofgem’s new price cap comes into effect. 

The regulator is expected to confirm the updated cap on Friday.

The current price cap stands at approximately £1,849 after three consecutive increases.

The predicted fall follows a slump in global gas and oil prices, but is smaller than an earlier estimate of 9 per cent, after easing trade tensions.

Cornwall Insight’s Craig Lowrey said that while the cap is “a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs,” he said it should be “taken in context.”

“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade,” he said.

“As such, there remains a risk that energy will remain unaffordable for many.”

The energy price cap, introduced by the government in January 2019, limits the price suppliers can charge per kilowatt hour, but total bills depend on consumption.

End Fuel Poverty Coalition co-ordinator Simon Francis said: “While any fall in energy bills will be welcome news to struggling households, the reality is that prices remain far too high for millions of people.”

He said that energy costs are still linked to volatile global fossil fuel markets, leaving families exposed to future price shocks, and that the government must fully invest in the Warm Homes Plan to ensure bills are lower for longer. 

“Delivering the promised £13.2bn investment in this plan must be the chancellor’s priority in the Comprehensive Spending Review,” Mr Francis said.

“Without long-term action to fix the root causes of cold, damp homes, the predicted drop in energy bills is just a temporary reprieve, not a real solution.”

Greenpeace UK’s head of climate Mel Evans said that even with the fall, energy bills are “vastly more expensive” than a few years ago.

“The government must regain control of our energy, through policies that stop gas companies from ripping off bill payers, and enable renewable energy to lower our bills for good,” she said.