Households in Great Britain face a further increase in energy bills from July, with the typical annual gas and electricity bill forecast to rise to £1,850, according to Cornwall Insight. The consultancy predicts that Ofgem’s quarterly price cap will increase by nearly 13% from the current level of £1,641, adding £209 to annual costs.
The rise is driven by soaring wholesale energy prices following the Iran war, which caused the UK’s gas market price to double earlier this year. Tehran’s closure of the Strait of Hormuz in response to US-Israeli strikes cut off Gulf energy supplies, pushing prices up sharply in February and March.
While a temporary ceasefire has prevented prices from reaching even higher levels—Cornwall had earlier estimated the cap could approach £2,000 a year—market prices remain significantly above normal. The increase is a blow to households already grappling with rising costs of essentials such as council tax and water.
Cornwall Insight principal consultant Craig Lowrey warned that even if the conflict ended immediately, the physical damage to infrastructure would make a return to April’s cap levels unlikely by autumn. "If the cap stays at a similar level as July, that is when the government will need to think seriously about targeted support for the most vulnerable," he said.
Energy campaigners and the government alike have called for accelerated investment in renewable energy to reduce dependence on volatile fossil fuel markets. Meanwhile, switching websites such as uSwitch have urged households to consider fixed-rate deals that may undercut the predicted cap.
