Household energy prices to jump by 13% from July

Josie Clarke, Press Association Consumer Affairs Correspondent

Ofgem’s price cap is to rise by 13% from July 1 driven by the ongoing conflict in the Middle East, the regulator has said.

The jump will equate to a rise of £18 a month for the average household using both electricity and gas, with households seeing an increase of 24% on their gas bills and 5% on their electricity bills.

The typical household is now facing an annual energy cost of £1,862, up £221 on current levels, with early forecasts that this will rise further still in October.

Ofgem chief executive Tim Jarvis said: “Today’s price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy.

“We understand many will be concerned about rising prices. While energy use typically falls over the summer months, there are still practical steps households can take to manage costs, including exploring fixed tariffs or changing their payment method. Smart meter customers can also take advantage of half price or cheap electricity at the weekends.

“While our energy supplies remain secure, the best way to limit this exposure is by investing in our energy network. That’s why we’re unlocking the funding needed for the biggest transformation of our lifetime to deliver a system that is secure, resilient and works for consumers across Great Britain.”

Energy Secretary Ed Miliband said: “The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority.

“We will continue to monitor the situation ahead of the winter and plan for all contingencies. In the immediate term it is essential to de-escalate this conflict to bring oil and gas prices down and as Britain faces the second fossil fuel crisis of this decade, we must learn the right lessons.

“The way to get bills down for good and avoid these price spikes is to go further and faster with this government’s drive for clean homegrown power we control. We are upgrading as many homes as possible ahead of winter with the biggest investment in warm homes in British history.”

Ned Hammond, deputy director of customer policy at Energy UK, which represents firms, said: “A rise of this scale will already be a concern for millions of customers but such worries will be magnified if bills remain at this level – or higher – over the winter months.

“So the Government must now focus on how it can best target support later in the year to those customers most in need – in addition to the help suppliers already offer.

“It’s another unwelcome reminder – coming too soon after the last one – of how our country’s high dependence on gas leaves us exposed to price spikes we can do nothing about resulting from conflicts thousands of miles away.”

The price cap refers to the default tariff applied when a customer has not signed for a fixed-rate deal.

It sets a maximum price per unit of gas and electricity, meaning households only pay for the amount of energy they use.

Currently, 40% of accounts – or 22 million – are fixed tariffs, according to Ofgem figures, and are therefore unaffected by this price rise.

Gillian Cooper, director of energy at Citizens Advice, said: “Energy bills are going up again in July, which will be painful news for already-stretched households.

“One of the key tools to help people through this – the energy debt relief scheme – keeps being delayed.

“The scheme should be supporting people struggling with historic energy debt right now and the Government needs to put it in place as soon as possible.

“And as we head into the summer, the Government must use this time to prepare wisely, ahead of autumn.

“Families with children, disabled people and those struggling to pay rent need better targeted support in place before it’s too late.”

Energy costs have been sent rocketing higher by Iran’s move to block the crucial Strait of Hormuz shipping route, through which a fifth of the world’s oil and gas is carried.

Cornwall Insight’s forecasts suggest the next cap in October will be at a similar level to July, even if the Middle East conflict were to end soon, because of the physical damage to infrastructure and lingering effect of disrupted supply.

Campaigners have warned over an “extremely difficult winter” ahead for the most vulnerable without extra support on bills.

Calls have been mounting for the Government to set out action to support the most vulnerable, but Chancellor Rachel Reeves stopped short of any immediate energy measures in her cost-of-living plan.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Behind every energy price rise are households whose direct debits are about to rise, families whose energy debt is harder to clear, and pensioners whose summer is already overshadowed by the winter ahead.

“Meanwhile, the energy industry has posted more than £3 billion in profits from its UK operations in the first three months of 2026.

“The Government cannot wait until September to act.

“It must confirm what support will be available, address the fact that relying on gas for heating is a dead end as the North Sea runs dry and and chart a path for households to find a permanent way off the gas price rollercoaster.”