Image source, PA Media

With the energy price guarantee "no longer relevant" from the beginning of July, and the fall in the energy price cap, the energy market should become more competitive once again.

But Martin Lewis believes deals offered by energy companies could look a bit different in the future.

"I am expecting to see existing customer offers - where you will get a bespoke offer from your firm rather than deals offered across the market," he tells Radio 4.

"One of the big problems with that is [not only] that it diminishes competition, but also the rules say that companies do not have to publish the details of their existing customer offers - which means people like me find it very difficult to assess them.

"You can't tell people whether they are worth it or not. I think we need a rule change on that as the market has changed."

Image source, PA Media

Consumer expert Martin Lewis tells BBC Radio 4 that although bills will fall, customers won't see a huge change in energy costs, because they won't be getting the government support any more.

"For every £100 you pay now, you will likely to be paying £80-£85 on energy from July," Lewis tells the Today programme.

"That is real manifest drop in energy bills. But the truth is - that's probably it. From October, it might go down a little bit more, but then we expect it to bounce back a bit in January.

"And if those [figures] are true - the reality is next wInter, people will be paying roughly what they did last winter - because rates are cheaper but they are not getting the £66 [government] support.

Faisal Islam
Economics editor

It is not just a hope that domestic energy bills have peaked but it is also the withdrawal of the vast bulk of support provided by the government that has kept typical bills at £2,500 since last October.

As this week's government borrowing numbers showed, that came with a quite a bill, resulting in the second worst April on record.

But it would be wrong to assume that it is absolutely certain that energy prices will now be permanently lower.

The Qataris - who are the world's biggest supplier of liquid natural gas - said that the fall in prices was down to a weak economy and an unusually mild winter in Europe.

“The worst is yet to come” was the view from the Qatari energy minister, even in a normal winter, against the backdrop of a reopened Chinese economy buying up the energy and restrictions remaining in Russia.

As this chart shows, the energy price cap started rising sharply in April 2022, after Russia's invasion of Ukraine.

By October, it was above £3,000. The government then introduced the price guarantee, which kept the typical annual bill to £2,500.

Now, after a fall in wholesale prices, the cap is down to £2,074 - and the price guarantee is no more.

Image source, .

The biggest factor behind energy bills is the cost of wholesale gas - which over the past couple of years have been volatile to say the least.

Wholesale gas prices, however, been falling for months. So why haven't consumers been feeling the benefit?

Ofgem boss Jonathan Brearley tells the BBC: "The companies they need to buy forward in the market.

"So right now they're not buying our power and energy for July, they're buying it for later on in the year. That means it does take time to feed through.

"But the good news is were not in the world we were in 2015 or 2016 before there was a price cap."

Bill payers in Ipswich have been reacting to the news of a fall in energy prices on BBC Breakfast.

Tom says he welcomes the reduction but it's just a "slice" of people's cost of living.

He says housing costs, like his mortgage, are still on the up, putting pressure on finances.

And now to Radio 4's Today programme interview with Ofgem boss Jonathan Brearley.

He says that while it is undoubtedly good news that energy prices will fall from July, they are still relatively high - and likely to stay that way for some time.

In a press release accompanying the announcement, Jonathan Brearley, the boss of Ofgem, says: "After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction."

But he admits: "We know people are still finding it hard, the cost-of-living crisis continues and these bills will still be troubling many people up and down the country."

He said people should contact their suppliers for help if they are unable to pay their bills.

We'll have more from Jonathan Brearley shortly - he's taking to the Today programme at the moment.

Image source, Reuters

Fixed energy deals have all but disappeared as an option for households because of the volatility of prices.

However, with a (relatively) lower price cap, does that people may again be able to shop around and switch to the supplier offering the best deal?

Potentially - but consumer groups have warned that might not be best for everyone, especially with uncertain future costs.

"We hope to see consumers back able to make some choices," said Emily Seymour, of consumer group Which? "However, it will depend on where energy prices go next."

Energy bills will fall to £2,074 a year for the typical household from July, under the new price cap announced by the regulator Ofgem.

Kevin Peachey
Cost of living correspondent

The announcement today will lead to the first drop in domestic energy prices for nearly three years.

It will mean a fall in bills for pretty much everyone - but there are a few things to remember.

Firstly, bills remain high compared with pre-Covid days.

Secondly, since April, there hasn’t been a discount on everyone’s bills as there was during the winter.

And thirdly, the cap limits the price of each unit of energy, not the total bill. If you use a lot of gas and electricity, your bill will still be high.

Lastly, anyone who pays by direct debit might not see an immediate impact. It will be up to their supplier to make that change to the monthly demand, so it is worth keeping across that change and any credit that may build up.

In short, it limits how much suppliers can charge households for each unit of gas and electricity they use.

It's set every three months by Ofgem, the energy industry regulator. Prices for variable tariff energy deals in England, Wales and Scotland are controlled by it.

But when wholesale prices soared after Russia's invasion of Ukraine, the cap rose sharply.

Minister then said household bills would be limited under the government's Energy Price Guarantee scheme. And as we've just said, that expires soon.

But now wholesale prices have fallen, the new cap will be lower than the old guarantee.

And why not Northern Ireland? Well, energy is regulated separately there, so bills will be held at £1,950 per year for an average household.

Since October, typical annual household energy bills have been capped at £2,500 under the government's Energy Price Guarantee.

But that scheme will expire at the end of June which means that, from July, the Ofgem cap will determine households bills again.

The new price cap will be lower than the guarantee.

Analysts predict Ofgem's decision will mean a £450 drop in a typical household's annual gas and electricity bill, to about £2,050.

Emma Owen
Live reporter

Image source, Getty Images

Welcome to our live coverage of the energy price cap announcement when we’ll find out how much households can expect to pay for gas and electricity from July.

At 7am, Ofgem, the energy watchdog, will announce the new cap on prices in homes in England, Scotland and Wales. We're expecting a drop - meaning a decline in bills for millions of households.

I’m here in London with colleagues from business, and together we'll bring you the announcement, the reaction and expert analysis on what this means for you.