Households in Great Britain will face the steepest summer rise in energy charges in four years after the government's energy price cap climbed by 13%, pushing the average dual-fuel bill to £1,862 a year from July until the end of September. The increase from £1,641 in the previous quarter is largely attributed to global energy market price surges caused by the war in Iran.
Energy Secretary Ed Miliband described the rise as “deeply unwelcome news” and stressed the need to de-escalate the Middle East conflict to bring down oil and gas prices. He reiterated the government's commitment to accelerating the transition to clean, homegrown power to avoid future price spikes.
Ofgem, the energy regulator, sets the cap based on wholesale market costs, which have been driven up by the Iran conflict. Under the new cap, electricity charges for direct debit customers will rise from 24.67p to 26.11p per kilowatt hour, while gas charges increase from 5.74p to 7.33p per kWh. The annual standing charge also contributes to the total.
The rise equates to an extra £18 per month or £221 per year for the average household. While this is the highest cap level since early 2024, it remains well below the peak of £4,279 in early 2023, which was mitigated by the government's energy price guarantee. Ofgem noted that updated typical consumption values reflect lower household usage due to milder winters and cost-of-living pressures.
Ofgem's interim chief executive, Tim Jarvis, said the increase was “almost entirely driven” by global gas price rises from the Middle East conflict. He warned that the autumn and winter outlook depends on a peace deal and the reopening of the Strait of Hormuz, with long-term disruption now seeming more likely. Meanwhile, Brent crude oil briefly fell below $95 a barrel after Iran pledged to restore commercial transit through the strait within a month.
Rising bills are expected to worsen record energy debt, which reached £4.5bn earlier this year. Jarvis advised consumers to consider fixing tariffs to protect against further cap increases, though this carries the risk of missing out on potential savings if prices fall.
