A Third of UK Homes Seen Falling Into Energy Poverty by October

(Bloomberg) -- Surging energy prices are projected to push one in three British households into fuel poverty by October, intensifying the cost-of-living crisis and heaping pressure on the new prime minister to take swift action.

Most Read from Bloomberg

• Americans Who Can’t Afford Homes Are Moving to Europe Instead

• Musk Lieutenant Scrutinized in Internal Tesla Purchasing Probe

• These Are the World’s Most (and Least) Powerful Passports in 2022

• Biden Contracts Covid as Pandemic Shows Its Staying Power

• Ex-Coinbase Manager Arrested in US Crypto Insider-Trading Case

The number of homes spending more than 10% of total income on energy will jump to 8.2 million that month, when bills are set to rise about 60%, according to charity National Energy Action. The stark outlook takes into account a £400 ($480) discount on bills for all consumers, laid out by the government in May.

UK inflation hit a fresh 40-year high in June and is set to get worse, potentially topping 11% in October when the next energy price hike kicks in. The industry is already warning that this winter is going to be grim for a lot of people.

Read more: UK Inflation at New 40-Year High Worsens Living Standards Crisis

“The soaring cost of energy, particularly for low-income and vulnerable households, is one of the biggest issues facing the country,” said Peter Smith, director of policy at NEA.

Soaring natural gas and power prices are underpinning the steep run-up in bills. The UK energy-price cap is set to leap to a record £3,285 in October, according to Investec Bank Plc, which estimates a further jump to about £3,360 in January. Energy consultant Cornwall Insight Ltd. sees a similar increase.

NEA estimates that 6.5 million households are already in fuel poverty across Britain, an increase of more than 50% in just over six months. That figure is forecast to climb a further 26% in October.

The figures underscore the fiscal challenges facing whoever succeeds Boris Johnson as prime minister -- Foreign Secretary Liz Truss or former Chancellor of the Exchequer Rishi Sunak. A decision on the new premier is due on Sept. 5.

Most Read from Bloomberg Businessweek

• Sam Bankman-Fried Turns $2 Trillion Crypto Rout Into Buying Opportunity

• The US Has Lost Its Way on Computer Chips

• Postmortem Sperm Retrieval Is Turning Dead Men Into Fathers

• Ghosts of 2012 Haunt Europe as Rate Hikes Begin

• Mortgage Boycott Shows How Deep China’s Property Crisis Goes

©2022 Bloomberg L.P.