Energy bills to surge by £200 a year from July...

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Analysts urge the Government to consider ‘targeted support’ on households if prices remain high



Household energy bills are on course to jump by £209 a year from July as the Iran war pushes up the price of oil and gas.

Cornwall Insight, the energy consultancy, said it expects the Ofgem price cap to rise by 13pc from £1,641 to £1,850 a year even as warmer summer weather arrives.

The rise in the cap – which limits the average annual energy bill faced by a family home – is worse than earlier predictions by analysts that prices would jump by £196.

The price cap fell by £117 in April after Rachel Reeves, the Chancellor, removed green levies from household bills.

However, the outbreak of war in the Middle East has sent oil and gas prices soaring, putting pressure on suppliers.

Cornwall Insight blamed “rising wholesale prices, which climbed sharply in February and March after US and Israeli missile strikes on Iran”.

It added that Iran’s retaliatory attacks had damaged Gulf energy infrastructure and triggered the closure of the Strait of Hormuz, a crucial shipping route for around 20pc of global oil and gas.

“A temporary ceasefire brought some calm to markets but prices remained elevated throughout the observation window, pushing the July forecast to more than £200 above the current cap,” it added.

The analysts warned the “biggest concern” was what will happen to the cap in October, when energy demand rises as temperatures fall.

A fall on April’s price cap is “unlikely” because of the damage caused to refineries and oil pipelines in the Middle East.

Craig Lowrey, the principal consultant at Cornwall Insight, urged the Government to consider “targeted support” on household bills if prices remain elevated.

Ms Reeves is expected to make an announcement this week on helping families with the cost of living, including potentially scrapping a planned increase in fuel duty.

Mr Lowrey said a summer rise in energy prices “will be painful for households but the bigger concern is October, when household demand traditionally picks up”.

He added: “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.”

Energy providers have urged families to fix their energy bills to avoid the worst of the rising price cap.

Richard Neudegg, the director of regulation at Uswitch, said: “A rise of this magnitude will be alarming, especially with higher costs forecast for the winter too. Thankfully, households can opt out of this price rise if they act now.

“The expected 13pc rise to energy bills is completely avoidable. A number of fixed tariffs currently undercut the predicted price cap, some by over £200 for the average home.”

Ofgem adjusts its price cap every three months and will announce the next level on May 27.

A government spokesman said: “We know families will be concerned about the impact the conflict in the Middle East will have on their energy bills.

“Tackling the affordability crisis is our number one priority. 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.”

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Energy price cap rise ‘will push millions in Great Britain into fuel poverty’



Millions of households in Great Britain will be pushed into fuel poverty after months of volatility on the global gas markets as energy bills rise by more than £220 a year under the government’s price cap from Wednesday.

As the cap on gas and electricity rates rises to the equivalent of £1,862 a year, the number of households forced to spend more than 10% of their income on energy bills will increase to 13.5m from almost 11.3m in April, according to fuel poverty campaigners.

The End Fuel Poverty Coalition warned that the steepest summer rise in energy charges in four years would leave almost 5.5m homes facing energy bills of about 20% of their income, up sharply from 4.3m in April this year. The charity calculated the figures based on research by the University of York.

Simon Francis, the coordinator of the End Fuel Poverty Coalition, said: “These figures show the reality behind the headline price cap figure: a growing number of households are spending an unsustainable share of their income just to heat their homes in winter and keep them cool in summer.”

Francis added that the situation could get worse. “With energy costs rising over the summer, any chance households had to reduce energy debts or build up reserves before the winter heating season will be wiped out,” he said.

Francis said: “If it is to be Andy Burnham as the next PM with his vision of a rewired Britain, then new ministers must also rewire how energy bills are set. Plans to devolve control of energy will count for nothing unless they are accompanied by a permanent social tariff, an end to energy debt, reduction of electricity costs and a credible plan to break the link between gas and electricity prices.”

The surge in energy costs has reignited calls for the government to tackle Britain’s energy affordability crisis. The union Unite has planned protests across the country to call for “an immediate and deep cut” to energy costs and a plan to renationalise energy companies.

Sharon Graham, Unite’s general secretary, said: “The increase in the energy cap is another kick in the teeth for workers and families who were already struggling with ever rising bills and the cost of living crisis. The UK has among the highest energy bills in Europe, they should be going down not up.”

https://www.theguardian.com/money/2026/jul/01/energy-price-cap-rise-will-push-millions-in-great-britain-into-fuel-poverty