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Household energy bills in Great Britain could increase by £288 a year in July as soaring wholesale costs caused by the Iran war are set to push up Ofgem’s price cap, according to the latest forecasts. Cornwall Insight said its prediction for the watchdog’s price cap from July to September now stands at £1,929 for a typical dual fuel household an increase of £288 or 18% on April’s cap. This marks a slight fall from its forecast earlier this month, which had seen the cap surging to £1,973 in July. It said this was caused by a ‘partial steadying in wholesale markets after a pause in energy infrastructure strikes and signals of a potential ceasefire in the Middle East conflict’. But Cornwall Insight warned a rise in the cap in July was ‘effectively unavoidable’ with rocketing wholesale prices over March now locked into the calculation and little chance that they will fall below pre-war levels in the coming weeks. The price most households pay for energy under the cap fall by 7% from April 1, or £117 a year to £1,641, driven by the government’s promise to cut bills by an average of £150 by removing green subsidies. But the prospect of a big jump in gas and electricity costs when the cap is next updated in July has prompted the government to say it will look at further targeted support as part of contingency planning efforts. Ofgem will confirm its next price cap level by May 27. Craig Lowrey, principal consultant at Cornwall Insight, said: ‘A rise in July is pretty much unavoidable, but how high prices go remains to be seen. There is some relief in the timing, summer is when energy demand is at its lowest, which should soften the impact on household energy expenditure. If higher wholesale prices continue, it will be the effects on the October cap that have the most impact, and that is when the question of government support for households is likely to be revisited.’ Minister for energy consumers, Martin McCluskey, said: ‘Tackling the affordability crisis is our number one priority and I know many families will be thinking about how events in the Middle East might impact the cost of living at home. ‘We will continue to fight people’s corner through this crisis and, as the Energy secretary has said, if it’s necessary to intervene, we will.’ By Holly Williams, Press Association Business Editor Press Association: Finance source: PA Copyright 2026 Alliance News Ltd. All Rights Reserved.
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