The energy price cap is forecast to rise to £1,823 per year for a typical household this winter, according to analysts at Cornwall Insight, as higher wholesale gas costs push up bills.
The predicted increase would take the cap from its current level of £1,731, adding around £92 to annual bills for a typical dual-fuel household paying by direct debit. The new cap is expected to apply from October to December.
Wholesale gas costs drive forecast
Cornwall Insight said the rise was driven by higher wholesale gas prices, which have increased due to geopolitical tensions and supply concerns. The consultancy warned that the cap could remain above £1,800 for the rest of the year.
Ofgem, the energy regulator, sets the price cap every three months based on wholesale costs, network charges, and other factors. The cap limits the amount suppliers can charge per unit of energy, but not the total bill, which rises with usage.
Impact on households and support
The forecast increase comes as households face continued pressure from high living costs. The government has said it will provide cost of living payments to the most vulnerable, but campaigners have called for more targeted support.
Energy bills have fallen from their peak of £4,279 in early 2023, but remain well above pre-pandemic levels. The cap was introduced in 2019 at £1,137 per year.
Cornwall Insight said the outlook for next year was uncertain, with prices likely to remain high as long as wholesale gas markets are volatile. The final cap level will be announced by Ofgem on 27 August.
