The energy price cap is expected to rise by more than £200 in July, according to industry analysts, as Ofgem prepares to announce the latest quarterly update on UK household energy costs
Households are set to discover how much energy bills will rise from July when the price cap is updated, with forecasts pointing to an increase of more than £200 and a gruelling winter of soaring bills ahead.
Regulator Ofgem will announce the level of the annual energy price cap for the period July 1 to September 30 for a typical dual fuel household across Wales, Scotland and England. Industry analysts Cornwall Insight predicted last week the cap will rise by £209 a year to £1,850 – an increase of 13% on April’s £1,641 annual cap.
The price cap sets a maximum price per unit of gas and electricity consumed, meaning households only pay for the energy they actually use. For the biggest stories in Wales first sign up to our daily newsletter here
While households will be largely protected during the warmer summer months, concerns are mounting over a significant financial blow when the cap is reviewed in October and energy demand increases as temperatures begin to fall.
Cornwall Insight’s projections suggest the cap in October will remain at a similar level to July, even if the Middle East conflict were to conclude in the near future, owing to the physical damage sustained by infrastructure and the lasting impact of disrupted supply, reports the Daily Record.
Pressure has been growing on the UK Government to outline measures to support the most vulnerable, yet Chancellor Rachel Reeves stopped short of announcing any immediate energy support in her cost of living plan.
She informed MPs last week: “We stand ready to act if market conditions worsen significantly later this year and I have been leading cross-government contingency work on design of potential future targeted and temporary support for businesses.”
Energy prices have been driven sharply upwards following Iran’s decision to blockade the vital Strait of Hormuz shipping channel, which carries a fifth of global oil and gas supplies.
However, households are yet to experience the full impact, as the price cap undergoes quarterly reviews, with April bringing a 7% reduction thanks to UK Government interventions designed to lower bills.
These measures included transferring 75% of the UK’s renewables obligation costs from household bills onto general taxation, while also abolishing the energy company obligation scheme.
Campaign groups have issued warnings about an “extremely difficult winter” looming for the most vulnerable without additional financial assistance on bills.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Households need reassurance and support, not a summer of suspense.
“That means the Government must act before winter to spell out what support will be available.”
The UK Government has maintained that “tackling the affordability crisis is our number one priority”.
