Tens of millions of British gas consumers face much higher energy bills after the UK energy regulator Ofgem increased the energy price cap - the maximum energy companies can charge customers per year - by more than half, due to the ongoing gas crisis in Europe. 

The change allows energy providers to pass on increases in wholesale gas prices to customers. 

"The energy price cap will increase from 1 April for approximately 22 million customers. Those on default tariffs paying by direct debit will see an increase of $943 from $1,738 to $2,682 per year," Ofgem said. 

It is the largest hike in the energy price cap history.

Controversially, the increase will be more for those who pre-pay, rather than set up direct debits from their bank accounts. Pre-paid accounts are usually favoured by low-income households and renters who rely on their landlord's arrangements. 

The regulator explained the rise was caused by wholesale gas prices "quadrupling" over the last 6 months. 

"This is because energy companies cannot afford to supply electricity and gas to their customers for less than they have paid for it."

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"Over the last year, 29 energy companies have exited the market or been put in special administration in the wake of soaring global gas prices, affecting around 4.3 million domestic customers," Ofgem added.   

CEO Jonathan Brearley said Ofgem would seek to assist the many people that may struggle to pay their bills next quarter. 

"We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can," he said. 

Who's helping customers?

UK finance minister Rishi Sunak has reacted to the Ofgem announcement by revealing his plan to help struggling families with the price hike. 

Sunak announced a $272 rebate on energy bills from October, with the savings being paid back to energy firms over the next 5 years. 

He added a council tax discount - that's the local tax paid by everyone in the UK, based on a government-assessed value of their home - worth around $200 depending on the 'band' residents are in, and the charges their local council enforces. 

He has been criticized by opposition lawmakers for not doing enough. 

And the Bank of England, the UK's central bank, said it will increase interest rates by 0.25 percent to 0.5 percent. It's the second rise in 3 months, following years of stable low rates. 

The increase is aimed at boosting savings power, therefore reducing consumer spending, and thereby reducing inflation. 

"Inflation is expected to increase further in coming months, to close to 6 percent in February and March, before peaking at around 7 percent in April," the Bank explained.