UK households may soon have to pay hundreds of pounds less per year than had been feared for their energy after gas prices dropped to their lowest levels since before Russia's invasion of Ukraine.
Analysts at Investec forecast that the energy price cap, which dictates what suppliers can charge for gas and electricity, will be as low as £2,600 per year from July.
That is nearly £500 less than the wealth manager's earlier forecast of about £3,100 per year.
It would also be lower than the UK Government's energy price guarantee, potentially meaning the Treasury will no longer have to shell out billions of pounds on subsidising household bills.
Martin Young, an energy analyst at Investec, told the Telegraph that the tumbling price of natural gas was behind the lower predictions for bills.
This drop is good news for consumers, but not for gas producers.
15-month low
Natural gas closed at a 15-month low on Wednesday in Europe at 64.30 euros (£56.68) per megawatt hour, as mild weather, an influx of liquified natural gas (LNG) and high gas storage levels cheered the markets.
Tom Marzec-Manser, head of gas analytics at ICIS, said: "Concerns that there may not be enough gas available for this winter to cover demand have started to evaporate."
Shares in Centrica, which owns British Gas, dropped by more than 8% yesterday off the back of the falling gas price.
But Mr Young warned that families still face paying significantly more for their energy than in previous years.
Before the Ukraine war, the most households had typically paid per year under the cap on bills was £1,277.
The government's energy price guarantee means a typical household won't pay more than the equivalent of £2,500 per year this winter, but that is due to rise to £3,000 from April.
Easing pressure
In July, some of the pressure will ease as a typical household's bill comes down again to £2,600 per year, according to Investec.
But Mr Young said: "These are still going to be tough times, because you have still got a pretty serious cost-of-living crisis."
Cornwall Insight has also forecast bills will fall to £2,800 per year in July, below its previous forecast of about £3,160.
FTSE 100
The UK's top share index, the FTSE 100, was up 12 points at 7,595 shortly after opening this morning, following yesterday's 31-point gain.
No FTSE 350 companies are due to report today.
Brent crude futures were 1% higher at $78.62 a barrel.