Key facts
- UK energy bills will rise 4% from October 1, reaching £1,723 annually for a typical household.
- This marks the highest energy price cap in three years.
- The increase is attributed to higher wholesale gas prices, influenced by the ongoing conflict in the Middle East.
- Ofgem, the UK energy regulator, confirmed the price cap adjustment.
- Approximately 22 million households are on price-capped tariffs, while 35% are on fixed tariffs.
Households in Great Britain will see their energy bills rise by 4% from October 1, reaching an annual average of £1,723 for a typical household. This marks the highest price cap in three years, primarily driven by increased wholesale gas prices stemming from the ongoing conflict in the Middle East. The price cap, set by energy regulator Ofgem, limits the amount suppliers can charge domestic consumers per kilowatt hour of energy. The current cap stands at £1,663, meaning the increase will add approximately £60 per year, or £5 per month, to average bills. Analysts had widely anticipated this rise, with Cornwall Insight predicting the 4% increase. Ofgem stated that volatile global gas markets remain the dominant driver of price changes, with high international gas prices continuing to impact UK energy costs. While gas bills are reportedly rising by 8%, electricity bills are seeing a slight decrease due to a VAT cut. Approximately 22 million households are on tariffs affected by the price cap, while about 35% of households are on fixed tariffs and will not be immediately impacted by this adjustment. Energy debt has become a significant issue, with suppliers reporting a collective debt of £6 billion, projected to reach £7 billion by year-end.