UK energy price cap set to rise 4% this winter, boosting household bills
Analysts say the British energy price cap will increase by 4% from October, pushing the average annual dual-fuel bill to about £1,729 and straining families during the colder months.
Energy consultancy Cornwall Insight forecasts that the UK’s statutory price cap will rise by 4% starting in October, resulting in an average yearly dual-fuel cost of £1,729 for a typical household. The increase reflects heightened wholesale prices linked to the conflict in the Middle East and a surge in gas-fired generation during recent European heatwaves, marking the highest cap level since July 2023. While the new prime minister pledged a VAT reduction on electricity to lower bills by about £45 per year, analysts say the higher wholesale costs will more than erase that benefit.
Ofgem is due to set the new cap on Wednesday, with projected electricity tariffs of 26.57p per kilowatt-hour and gas charges of 7.90p per kilowatt-hour for customers on direct debit. Commentators highlight the episode as a reminder of Britain’s dependence on volatile imported gas and suggest that only a shift away from such reliance can curb future price spikes. The consultancy also expects another rise in January if current market conditions persist, though developments in the Middle East could alter the outlook.
Why it matters
Higher energy caps will increase winter utility costs for many UK households, affecting disposable income and cost-of-living pressures.
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