Key facts
- UK household energy bills are projected to increase by 4% from October.
- This will mark the highest level for bills since the summer of 2023.
- The price cap is expected to rise to £1,729 ($2,344) for the October-December period.
- Higher wholesale gas prices, driven by the Iran conflict, are the primary cause.
- The increase in energy bills contributed to UK inflation reaching 2.9% in July.
UK household energy bills are expected to rise by 4% in October, reaching their highest point since the summer of 2023, according to energy consultancy Cornwall Insight. The firm attributes the increase to the ongoing conflict in Iran, which has tightened global gas supply and made restocking in Europe more difficult and expensive.
Ofgem, the UK's energy regulator, sets the price cap quarterly. For the October-December period, the annual cap is projected to increase to £1,729 ($2,344), up from the current £1,663 ($2,254). This follows a previous 13% jump in bills between July 1 and September 30, 2026, also driven by higher wholesale gas prices amid the Middle East crisis.
The projected increase is further fueled by uncertainty surrounding the US-Iran conflict, which has pushed wholesale prices for the upcoming winter to nearly a four-year high. Europe's summer heatwaves have also contributed to the gas supply crunch. The surge in energy costs has impacted broader inflation, with UK inflation reaching 2.9% in July, its highest in four months, signaling a potential new inflation shock cycle.