Analysts at Cornwall Insight now predict the household energy price cap will rise by £209 a year from July, pushing the average annual dual-fuel bill from £1,641 to around £1,850.
The increase – driven largely by soaring wholesale energy prices linked to the Iran conflict – would represent a 13% jump in just three months.
And experts warn prices may stay painfully high into autumn and winter.
Why energy bills are rising again
Global wholesale energy markets have been highly volatile since the conflict escalated in the Middle East earlier this year.
One of the biggest concerns has been disruption around the Strait of Hormuz — a major global shipping route through which around a fifth of the world’s oil and gas passes.
The instability has pushed oil and gas prices sharply higher, feeding directly into UK household energy bills.
At one stage, Cornwall Insight warned bills could surge to nearly £2,000 a year.
Craig Lowrey said forecasts had dramatically worsened in recent months.
He explained: “Over the past few months, we’ve watched our forecasts shift from showing virtually no quarter-on-quarter increase to a 13% rise in current bills – with this change due to the impacts of the Middle East conflict.”
Experts fear an even bigger winter ‘payment shock’
Although summer energy use is typically lower, experts say the bigger concern is what happens later in the year when temperatures drop and heating demand surges again.
Cornwall Insight warned that current forecasts suggest October’s price cap could remain close to July’s elevated levels.
That means households may not get the usual autumn relief many were hoping for.
The consultancy said: “While households will understandably be frustrated by a rise during the summer, the bigger concern is October, when demand picks up again.”
It added that even if the conflict ended immediately, damage to infrastructure and disrupted global supply chains mean energy prices are unlikely to fall back to earlier levels quickly.
Millions could struggle this winter
Campaigners are now urging the Government to set out emergency support plans before winter arrives.
End Fuel Poverty Coalition warned millions of families already struggling with energy debt could face an extremely difficult winter if prices remain high.
Simon Francis said: “If bills remain high when heating season begins, millions of households already in energy debt or struggling to keep their homes warm will face an extremely difficult winter.
“Households need reassurance and support, not a summer of suspense.”
Government responds to energy price fears
A government spokesperson said ministers understood households were worried about rising bills and pointed to plans for cleaner domestic energy generation.
The 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.”
Millions could be missing easy savings
While households cannot control global energy prices, experts say many people could still reduce costs by changing everyday habits and reviewing tariffs now.
Research from E.ON Next suggests almost 19 million UK households may be missing opportunities to save money by using electricity outside peak hours – but only if you switch to a tariff that rewards it.
The company found:
- 34% of people did not realise electricity can cost less at certain times of day
- Only half of Britons fully understand off-peak pricing
- 38% say flexible tariffs feel too complicated
Yet customers using off-peak tariffs have already collectively saved more than £1.5 million by shifting electricity use away from peak evening hours.
The simple appliance changes that could cut bills
Experts say small household changes can add up surprisingly quickly, and switching to a tariff that varies according to the time of day can pay off.
According to E.ON Next:
- Running a tumble dryer off-peak could cut costs by 55%
- Washing machine cycles could fall from 39p to 18p
- Charging devices overnight can reduce electricity costs
- Eco appliance settings can significantly lower energy use
Peak electricity prices are typically highest between 4pm and 7pm.
8 easy ways to lower energy costs before winter
Experts recommend households use the warmer months to improve home energy efficiency before heating systems are needed again.
Recommended steps include:
- Bleeding radiators
- Checking for draughts
- Servicing boilers
- Improving insulation
- Washing clothes at 30°C
- Avoiding unnecessary tumble dryer use
- Batch cooking meals
- Using dishwasher eco settings
Ofgem will officially announce the next energy price cap on May 27.
But with wholesale markets still volatile and winter fears growing, experts say households should prepare for continued pressure on energy bills well beyond summer.
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Dave Cawley said many households still have ways to reduce the impact of higher bills.
He explained: “When bills rise this sharply, it can often feel like households have very little control, but there are still ways people can reduce the financial impact.
“Even relatively small savings across energy, groceries and household spending can quickly add up over the course of a year.”
Have you fixed your energy tariff ahead of the rise? Tell us in the comments below…
