- Average household energy bills in Great Britain could rise by more than £200 from July.
- The expected increase follows sharp volatility in global gas markets linked to the Iran conflict.
- Experts warn the bigger pressure may arrive in autumn when heating demand rises again.
Households across Great Britain are being warned to prepare for another rise in energy bills, with analysts forecasting annual costs could climb to nearly £1,900 from July as the fallout from the Iran conflict continues to shake global gas markets.
Energy consultancy Cornwall Insight now expects Ofgem’s energy price cap for a typical dual-fuel household to rise to around £1,850 between July and September. That would mark an increase of £209 from the current £1,641 cap set for April to June, representing a jump of almost 13 per cent.
The projected rise in UK energy bills comes after wholesale gas prices surged earlier this year following disruption in the Middle East. Markets were rattled after Iran moved to shut the Strait of Hormuz, a critical shipping route that carries roughly a fifth of the world’s oil and gas supplies, in response to US-Israeli strikes.
Although prices eased slightly after a temporary ceasefire, wholesale energy costs have remained significantly higher than normal, adding fresh pressure to households already dealing with rising food prices, council tax increases and higher water bills.
Ofgem adjusts the price cap every three months based on the cost of supplying gas and electricity to homes, including wholesale market prices in the months leading up to each review. The regulator is expected to announce the next cap for July to September on May 27.
Summer rise may sting, but autumn is causing bigger concern
Analysts say the timing of the increase may soften the immediate blow slightly because energy use typically falls during warmer months. But there are growing fears that households could face a much harsher situation later in the year if prices remain elevated into autumn.
Cornwall Insight warned that even if the Iran conflict were resolved quickly, damaged infrastructure and ongoing supply disruption could prevent prices from returning to April levels by October.
At one stage earlier this year, the consultancy had predicted bills could rise to as high as £1,973 annually before market prices cooled slightly.
Craig Lowrey, principal consultant at Cornwall Insight, reportedly said the forecasts had shifted dramatically within a matter of months due to the impact of the Middle East conflict on energy markets.
He reportedly added that if October’s cap remains close to July’s level, the Government may need to consider targeted support for vulnerable households before winter arrives.
Lowrey also reportedly said the long-term solution lies in expanding renewable energy capacity so UK households are less exposed to geopolitical shocks taking place thousands of miles away.
Pressure grows on Government over winter support plans
Consumer groups are also beginning to raise concerns over what another expensive winter could mean for households already struggling with energy debt.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, reportedly said millions of families could face an “extremely difficult winter” if bills remain high once colder weather pushes up energy demand again.
He reportedly said households needed clarity from the Government well before winter on what support measures would be available.
The latest forecasts underline how heavily Britain’s energy costs remain tied to international gas markets, leaving households vulnerable whenever global conflict disrupts supply chains or fuels market panic.
