UK households should see their energy bills fall soon in some long-awaited good news amid the cost-of-living crisis.

Just last week there was uproar after British Gas announced its profits increased 10-fold to £750m in 2023.

The supplier said the jump from £72m in 2022 was due to regulator Ofgem allowing it to recover losses of £500m it racked up in the aftermath of Russia's invasion of Ukraine.

However, Ofgem will announce its latest price cap on Friday, with energy consultancy Cornwall Insight predicting the regulator will lower it by around £293 a year.

That would see the typical household’s bill falling from £1,928 per year to £1,635 from April 1, a drop of around 15 per cent.

Cornwall Insight’s forecast, which noted that the UK’s energy prices look to have weathered disruption in the Red Sea, is normally very close to Ofgem’s announcement, as both are based on publicly available data.

However, the firm warned that as long as the UK is reliant on fossil fuels it will have to continue importing expensive gas from countries which could decide to stop selling to Britain.

While the forecast from Cornwall is considerably lower than the current price cap, it is marginally higher than the £1,620 that the consultancy forecast just over a month ago.

Cornwall Insight principal consultant Dr Craig Lowrey said that despite the predicted fall, prices would remain a struggle for many and remained hundreds of pounds above pre-pandemic levels.

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“Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis,” he said.

“Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down.

“But we mustn’t get too complacent. Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.

“Even with the drop, prices will remain a struggle for many. We need to remember, that bills remain hundreds of pounds above pre-pandemic levels, and if we don’t speed up the switch to sustainable energy and cut down on volatile imports, they are likely to stay that way.”