Unexpected Rise for Household Energy Bills
Millions of households across Great Britain are set to see their energy costs increase from the start of the new year, following a surprise announcement from the energy regulator. Contrary to widespread expert forecasts predicting a price drop, Ofgem has confirmed its price cap will rise by 0.2 per cent, effective from 1 January.
What the New Price Cap Means for Your Wallet
This adjustment means the average household in England, Scotland, and Wales paying by direct debit for a dual-fuel tariff will see their monthly bill increase by approximately 28 pence. Annually, the average bill for those on a default tariff will climb from £1,755 to £1,758. This decision, announced on Friday 21 November 2025, has caught many off guard, as analysts from firms like Cornwall Insight had projected a one per cent decrease in the price cap.
Why Are Bills Rising When Wholesale Costs Are Falling?
The increase is particularly puzzling given the context of falling wholesale energy costs. Ofgem itself acknowledged that wholesale prices have dropped by four per cent over the last three months. However, the regulator defended its decision by pointing to ongoing volatility in market conditions, suggesting that other factors beyond the immediate wholesale price are influencing the final cost to consumers. This move leaves many families facing a slight but unexpected financial pressure as they enter 2025.
