Martin Lewis has issued a stark warning to British households about an impending spike in energy costs, predicting that the October Price Cap will see a "material rise" driven by escalating wholesale natural gas prices. The Money Saving Expert shared his analysis on X (formerly Twitter) on July 14, stating that the outlook "ain't looking good" for consumers.
Wholesale Rates Driving Bills Higher
Lewis explained that the UK natural gas rate currently sits at 129.42p per therm, a key driver for both gas and electricity bills since gas is used in electricity generation. While most of a household bill comprises policy costs, firm costs, distribution costs, and VAT, wholesale rates are the biggest variable factor. He noted that the Middle East conflict, which began on February 28, has directly impacted wholesale prices, causing a re-spike that will affect the next three-monthly Price Cap starting in October.
According to Lewis, the Price Cap is based on average wholesale rates from May 19 to August 18, 2026. Two weeks ago, it appeared that October’s Cap would be similar to July’s, but now a significant increase is expected—on top of July’s 13% rise.
Fixed Rates and Market Impact
For fixed-rate energy deals, Lewis warned that rates move more quickly as they are tightly linked to wholesale prices. A couple of weeks ago, the cheapest fixes were 15% below the current Cap; now they are around 11% below. This indicates a narrowing window for consumers to lock in lower rates.
Lewis also addressed concerns about energy suppliers profiting from the price surge. In response to a comment on his post, he clarified: "For generators and distributors, almost certainly, the opposite for retailers, which is why we have to hope the stress testing Ofgem did works so we don't see any go bust."
Broader Context and Expert Agreement
This warning follows a similar alert from Lewis in May, when he predicted continued rises in energy bills. Other cost-of-living experts have echoed his concerns, highlighting the impact of the Middle East conflict on oil prices. The conflict has driven up wholesale oil prices, which in turn affect natural gas markets.
Lewis shared three graphs to illustrate the likely trajectory of energy bills, emphasizing that the situation is deteriorating. His post garnered significant attention, with many Brits expressing anxiety over their winter energy costs.
