Energy bills for households in Great Britain are forecast to rise by £209 a year to the equivalent of £1,850 from July, according to analysis by Cornwall Insight. The increase, driven by rising wholesale energy prices following the Iran war, represents a nearly 13% jump from the current price cap of £1,641 set for April to June.
The consultancy said the main factor behind the hike is the surge in gas prices, which doubled earlier this year after Tehran effectively shut the Strait of Hormuz in response to US-Israeli strikes on Iran. While a temporary ceasefire saw markets retreat from historic highs in March, when Cornwall estimated the cap could reach almost £2,000, prices remain significantly above normal levels.
Craig Lowrey, principal consultant at Cornwall Insight, warned that even if the Iran war ended immediately, the physical damage to infrastructure means a return to April's cap levels by autumn is unlikely. He said: 'If the cap stays at a similar level as July, that is when the government will need to think seriously about targeted support for the most vulnerable.'
Danny Gross, an energy campaigner at Friends of the Earth, called the predicted rise 'a kick in the teeth' for millions struggling with the cost of living. He urged rapid expansion of renewable energy and home insulation as a way to permanently lower bills and reduce exposure to fossil fuel price volatility.
The government has postponed a planned 5p rise in fuel duty for the rest of the year, and further cost-of-living measures are expected. A government spokesperson said: 'The lesson of yet another fossil fuel crisis is the UK needs to get off the fossil fuel rollercoaster and on to clean homegrown power we control.' In the short term, switching websites suggest households consider fixed-rate deals, which may undercut the predicted July cap.
