The Treasury has stated it is too early to intervene, as the full scale of winter price increases remains uncertain. Ministers are facing mounting pressure to reduce utility bills, with millions of households in Great Britain experiencing anxiety over energy costs. Gas and electricity prices are projected to reach nearly £1,900 from this summer.
Forecasted Rise in Energy Bills
The typical dual-fuel bill is expected to increase by almost 13% under the government's energy price cap, adding £209 annually to household expenses. This is a significant blow to families already grappling with rising costs for essential goods. Market analysts at Cornwall Insight attribute the hike to the Iran war, which caused the UK's gas market price to double earlier this year. They caution that the quarterly price cap is likely to remain above pre-crisis levels until early winter, even if geopolitical tensions ease, leaving households vulnerable to elevated costs as heating demand rises in colder months.
Expert Warnings and Calls for Support
Craig Lowrey, principal consultant at Cornwall Insight, warned that unless the price cap drops in autumn, the government will need to consider targeted support for the most vulnerable. Rachel Reeves recently announced a package of cost-of-living measures but has not yet addressed domestic energy costs. She informed MPs that Treasury officials are developing contingency plans for winter, with any household support being 'targeted and temporary'. Instead, the chancellor unveiled 'Great British summer savings' by reducing VAT on attraction tickets and children's meals, set to take effect just before the energy price rise, coinciding with the start of the summer holidays.
Disappointment Among Campaigners
Campaigners expressed disappointment at the lack of action on energy bills. Simon Francis of the Fuel Poverty Action Campaign stated, 'We had hoped the predictions of a huge rise in the price cap would prompt ministers to go further and faster in reducing bills.' He noted that delays in announcing support may cause anxiety for households on direct debit, as energy firms could increase payments in anticipation of higher winter costs.
Treasury's Position and Future Outlook
The Treasury insists it is too soon to act, as the scale of winter price increases remains unclear and depends on whether a US-Iran peace deal reopens the Strait of Hormuz. According to Cornwall Insight forecasts, the unit price of electricity is expected to rise to 26.03p per kilowatt hour from July, while gas will increase to 7.16p/kWh. Household bills will vary based on consumption. Ofgem is considering lowering its assumptions for average energy use, which may make the new cap appear similar to the current one when announced, despite higher unit rates.
A government spokesperson said: 'We know families will be concerned about the impact of the Middle East conflict on their energy bills. Tackling the affordability crisis is our number one priority. The lesson of yet another fossil fuel crisis is that the UK needs to transition away from fossil fuels and towards clean, homegrown power we control.'
