British Gas has issued a stark warning to customers, projecting that annual energy bills could reach £1,880 by the second quarter of 2027. This forecast comes after the latest energy price cap increase by Ofgem, which took effect on July 1, 2026, raising the average household bill by £221 to £1,862 per year.
Price Cap Increase and Global Factors
The energy price cap, which limits how much suppliers can charge per unit of gas and electricity on variable and tracker tariffs, rose by 13% on average this week. This follows a reduction in April 2026, but global events have reversed the trend. According to Ofgem, the increase reflects "continued volatility" in global energy markets and higher wholesale gas prices, driven by the ongoing conflict in the Middle East.
Tim Jarvis, CEO of Ofgem, stated that the increase is a result of "continued volatility" in global energy markets and higher wholesale gas prices, driven by the ongoing conflict in the Middle East.
British Gas Projections for 2027
British Gas, in collaboration with respected forecaster Cornwall Insight, has released its predictions for future price cap changes. Although the company notes low confidence in next year's estimates, it currently projects the cap will rise to £1,880 for Q2 next year, starting April 1, 2027.
Dr Craig Lowrey, principal consultant at Cornwall Insight, explained: "Elevated wholesale prices seen in May and parts of June will already be locked in, which means prices are unlikely to fall to the levels seen in the first three months of the year."
Impact on Households
The rising costs have sparked concern among consumer groups. Adam Berman, director of policy and advocacy at Energy UK, warned: "Too many households are already struggling to pay their energy bills, which has resulted in a debt crisis that will only get worse if prices remain high this winter and beyond."
Matt Copeland, head of policy and public affairs at National Energy Action, called the current projections "deeply worrying." He added: "After years of extraordinarily high energy costs, many households have exhausted their savings, built up energy debt and are rationing their heating and electricity to get by."
Advice for Consumers
Given the projected increases, many households may consider switching to a fixed-rate tariff. Sabrina Hoque, energy expert at Uswitch.com, advised: "Around 60% of the nation is still on a default tariff and should take power into their own hands to avoid these rocketing rates. If you haven't switched tariffs within the last 18 months, you are almost certainly, by default, on a standard tariff and paying more than you need to for your gas and electricity."
British Gas will revise and edit its predictions every week as it continues to review how the price cap is calculated and any future changes that could affect prices.
