Household energy bills are on course to jump by £209 a year from July as the Iran war pushes up the price of oil and gas
The forecast from the energy consultancy Cornwall Insight’s final forecast for the July – September 2026 would see the new cap represent an increase of 13% on the current £1,641 annual bill.
The main driver for the increase is rising wholesale prices, which climbed sharply in February and March after US and Israeli missile strikes on Iran, and the subsequent retaliatory attacks, saw damage to Gulf energy infrastructure and the closure of the Strait of Hormuz, a shipping route for around 20% of global oil and gas.
A temporary ceasefire brought some calm to markets, but prices remained elevated throughout the observation window, pushing the July forecast to more than £200 above the current cap.
While households will be understandably frustrated by a rise during the summer they say that the impact will be reduced as household energy usage typical falls during the hotter months.
The bigger concern is October, when demand picks up again and current forecasts point to a similar cap level as July.
While the October cap will depend on how the Middle East conflict unfolds, even if the conflict were to end tomorrow, the physical damage to infrastructure, and lingering effect of disrupted supply, means a fall back to April’s price cap levels in the autumn looks unlikely.
