Key facts
- The energy price cap in Great Britain will rise by 4% from October.
- The typical annual household energy bill will reach £1,723.
- This is the highest price cap seen in three years.
- The increase is attributed to the conflict in the Middle East and extreme weather.
- Inflation is expected to rise due to increasing energy prices.
Households in Great Britain are facing the highest energy price cap in three years, with bills set to rise by 4% from October to £1,723 annually for a typical household. This follows a significant 13% increase in the previous quarter. The energy regulator, Ofgem, attributed the latest rise primarily to the ongoing conflict in the Middle East, which has driven up gas and oil prices, and to extreme weather conditions impacting power demand and generation.
Economists anticipate that the headline rate of inflation will increase in the coming months as energy prices continue their upward trend. Official figures released last week showed inflation had already risen to 2.9% for the year ending July. In response to the cost of living pressures, Prime Minister Andy Burnham has pledged to remove VAT from domestic electricity bills starting in October, aiming to provide some relief to consumers.