- Energy bills are forecast to remain close to current levels through winter despite a possible small fall in October.
- Cornwall Insight expects the October energy price cap to stand at about £1,849 a year on a like-for-like basis.
- Analysts say geopolitical tensions and high wholesale gas prices continue to cloud the outlook.
UK energy bills are expected to remain high throughout the winter, with analysts warning that households are unlikely to see meaningful relief even if the next energy price cap falls slightly. The latest forecast comes as Ofgem's energy price cap rises by 13 per cent from July 1, increasing annual bills for a typical household by £221 to £1,862.
According to energy consultancy Cornwall Insight, the price cap could edge down by around 0.5 per cent in October, taking annual bills to roughly £1,849 on a comparable basis. However, the consultancy said the expected reduction would be too small to significantly ease pressure on household budgets as colder weather drives up energy use.
Why prices are expected to remain elevated
The forecast reflects a slight improvement in wholesale gas markets after the 60-day ceasefire between the US and Iran, which helped reduce some of the volatility seen earlier this year. However, Cornwall Insight said uncertainty remains over developments in the Middle East, including the future of the Strait of Hormuz, peace negotiations and the pace of repairing regional energy infrastructure.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, reportedly said the ceasefire had given energy markets "some breathing room" but described it as "a pause, not a resolution". He added that even if the conflict eases further, damaged infrastructure and disrupted supply chains are likely to keep energy prices under pressure for some time.
Although the October price cap could be marginally lower than July's, analysts warn the financial impact may feel greater because households typically begin using their heating again during autumn.
Pressure grows ahead of winter
The outlook also raises fresh questions about whether the government will introduce additional support for households before winter. Earlier this year, Chancellor Rachel Reeves said financial assistance could be considered if energy prices remained elevated into the colder months. With a change in political leadership now underway, any decision on further support is expected to fall to the next Chancellor.
Cornwall Insight also argued that longer-term reforms, including social tariffs, funding environmental levies through general taxation or removing VAT from energy bills, could offer more lasting relief. However, the consultancy said there is currently little indication that any of those measures are being actively pursued.
The warning comes as household energy debt continues to climb. According to Ofgem, unpaid bills owed to energy suppliers reached a record £4.79 billion in the three months to March, up 5 per cent from the previous quarter and 15 per cent higher than a year earlier.
While the outlook for October appears more stable than earlier forecasts, analysts say many households are still likely to face another costly winter unless wholesale energy prices fall more significantly over the coming months.
