Martin Lewis has issued a June 2027 energy price update, noting that the cost of gas has plummeted following a landmark agreement between the US and Iran. The money-saving expert confirmed that energy deals are already becoming more affordable, offering rare positive news for British households grappling with high energy bills.
US-Iran Agreement Drives Down Prices
The consumer finance expert stated earlier this week that he anticipated prices would soon fall. This followed an accord announced between the US and Iran to cease hostilities and reopen the crucial Strait of Hormuz. The memorandum of understanding, now in effect, was signed by Donald Trump and Iranian president Masoud Pezeshkian.
The agreement has prompted a decline in oil and natural gas prices, subsequently driving down energy costs. At the time of writing, Brent crude has fallen by approximately $7 a barrel and UK natural gas by around 14 per cent.
Fixed Deals Already Cheaper
Mr Lewis confirmed that fixed energy deals were already being offered at roughly 5 per cent less than before. He said: "Energy fixes have started to get cheaper, now 5% below April price cap."
Nevertheless, Mr Lewis cautioned earlier in the week that consumers should not anticipate a substantial reduction in the forthcoming price cap, which covers October to December. The next price cap is expected to be announced on August 26 by energy regulator Ofgem, reports the Express.
Impact on Households
Approximately 60 per cent of households in England, Scotland, and Wales are on a standard variable tariff, meaning their bills are governed by the price cap. The current energy price cap is due to increase on July 1 by 13 per cent. This means that a household with typical energy consumption paying by direct debit will pay £1,862 annually, a rise of £221 on the previous price cap.
Mr Lewis cautioned that it could climb even further, despite the cessation of hostilities. He said: "The US and Iran signing a framework deal has pushed natural gas prices down. These wholesale prices are a key driver of UK gas and electricity bills. As the six-month graph shows, though, prices still have a long way to fall before returning to pre-conflict levels."
Outlook for October
He added: "The good news is that this could lead to slightly cheaper fixed tariffs being launched in the coming days. However, without substantial further drops the October price cap still looks likely to be significantly higher than it is today."
When asked why he believed the price cap would increase from October, he responded: "It's the same reason the energy Price Cap HASN'T yet risen due to the Middle East crisis. It is time-lagged. So slow to rise, slow to fall."
