Households in the UK have been warned to switch energy tariffs immediately after the cheapest fixed deal rose by £111 in two weeks. The best fixed tariff has increased from £1,424 to £1,535 per year since mid-July, an almost 8% jump.
Wholesale gas prices surge 42%
The increase follows a 42% surge in wholesale UK gas prices over the past month, driven by renewed instability in the Middle East. Experts fear households face another expensive winter as suppliers warn Ofgem's energy price cap could rise by 5.8% in October to around £1,760, with forecasts suggesting bills could reach £1,865 from January.
Despite the recent rises, fixing is still cheaper than remaining on the current £1,663 price cap. The cheapest fixed tariff is about £128 lower than the cap, though savings have narrowed as suppliers respond to rising wholesale costs.
Cheapest fixed deals compared
According to Uswitch, the cheapest fixed deals available as of July 27 are:
- Outfox Energy: £1,535 – saving £128 vs price cap
- Fuse Energy: £1,594 – saving £69
- Outfox Energy: £1,609 – saving £54
- E.ON Next: £1,612 – saving £51
- Fuse Energy: £1,618 – saving £45
The spike follows weeks of tension in the Gulf, pushing up wholesale prices. Analysts warn that waiting for prices to fall could prove costly.
From October, VAT will be removed from domestic electricity bills until March, saving a typical household about £45 over a year. However, this applies only to electricity, not gas, so households relying on gas central heating may still see overall bills rise if wholesale prices remain high.
Expert warns of 'turbulent' market
Sabrina Hoque, energy expert at Uswitch, said: "Wholesale gas prices have risen sharply over the past month, and we're already seeing that filter through into the fixed tariff market – the cheapest deal available today is £111 more expensive than it was just two weeks ago.
"Suppliers are already warning there could be a bigger jump in the price cap in October, with another rise to follow in January. That's a reminder that, for those on standard tariffs, the energy market is turbulent and getting off the price cap should be a priority.
"Households who've been putting off switching are leaving savings on the table. Don't wait until you turn the heating on to find out what winter is going to cost you. Fixing your rates now still beats sticking on the price cap, and it's the only way to know exactly what you'll pay through the cold months. Run a comparison to see your options."
The direction of wholesale gas prices in the coming weeks will be crucial in determining whether suppliers continue to increase fixed tariff costs before winter.
