UK energy bills may jump 30% in early 2027 on soaring gas prices

Key facts

• UK household energy bills could jump 25-30% in Q1 2027 due to soaring natural gas prices.
• France's EDF forecasts a 30% hike to £2,165 ($2,897) annually for typical households in Q1 2027.
• Bloomberg Economics projects a 25% spike, or £427 ($571), to about £2,150 ($2,878) annually.
• Ofgem raised the energy price cap by 4% for October-December 2026, reaching a three-year high.
• Middle East tensions are reducing global LNG supply, impacting Qatari and UAE cargoes.
• The Dutch TTF gas price was quoted at $92.95 (80.545 euros) per MWh, above the 80-euro threshold.

UK household energy bills are forecast to increase significantly in early 2027, potentially by as much as 30%, as soaring natural gas prices driven by Middle East tensions continue to impact global energy markets. The front-month price for Dutch Title Transfer Facility (TTF) gas was quoted at $92.95 (80.545 euros) per megawatt-hour, remaining above the 80-euro threshold and nearing levels seen during the 2022-2023 crisis.

France's EDF, a major energy provider in the UK, projects that the UK's energy regulator Ofgem will hike the energy price cap by 30% to £2,165 ($2,897) a year for a typical household for the January-March 2027 period. This compares to the current £1,723 ($2,306) for October-December 2026. Earlier, Bloomberg Economics had projected a 25% increase, or £427 ($571), to approximately £2,150 ($2,878) annually for the same period.

The escalation of conflict in the Middle East has disrupted oil and LNG supply routes, particularly from the Persian Gulf, leading to a tighter global LNG market. This has increased competition for available cargoes that do not traverse sensitive chokepoints, such as the Strait of Hormuz. Spot LNG prices in Northeast Asia have climbed to $28.40 per million British thermal units (MMBtu), a $2.70 increase from the previous week. ING commodities strategists Warren Patterson and Ewa Manthey noted that these tensions diminish hopes for increased LNG flows from the Persian Gulf, leaving the global market tight as winter approaches.