The energy price cap will rise by 13% from July 1 (Image: Getty)
The energy price cap will rise by 13% from July 1 for a typical household in England, Scotland and Wales, Ofgem has said. Soaring wholesale costs caused by the impact of the Iran war will hit Brits for the first time with bills will set to cost £18 more a month.
This means households using the typical amount of gas and electricity will jump by £221 a year, with an annual bill of £1,862. The hike will affect millions of homes on variable tariffs in England, Scotland and Wales, and suppliers are warning bills could increase further in the winter months. Global energy markets have been thrown into turmoil after Iran blocked the Strait of Hormuz, a vital chokepoint that carries around one-fifth of the world’s oil and gas supplies.
Average gas and electricity bill to jump to £1,862 a year from July until end of September (Image: Getty)
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Great Britain’s energy regulator, Ofgem, sets a limit on how much suppliers can charge per unit of gas and electricity, based on the cost of delivering energy to households, including average wholesale prices in the months preceding each new price cap period.
Under the new energy price cap, households that pay via direct debit will see electricity price skyrocket from the current rate of 24.67p per kilowatt hour to 26.11p per kWh, while gas charges will rise from 5.74p per kWh to 7.33p per kWh.
The last time energy bills were this expensive was January 2024. 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.
“To help people facing higher costs, the Chancellor acted last week to freeze fuel duty and made bus travel free for children across England in August. We have taken £150 average costs off energy bills for the years ahead and we have also extended the warm home discount for around six million families.
Global energy markets are currently in turmoil (Image: Getty)
“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.”
Richard Neudegg, director of regulation at Uswitch.com said the “real concern is what comes next”.
He said: “Millions of households will soon see their energy rates rocket. With prices forecast to stay high, the real pain will come when the heating goes back on in the autumn and through winter.
“Households are on a standard variable tariff by default – so if you haven’t switched, your rates will go up in July unless you take a good fixed deal.
“No one wants to think about winter during hot weather, but fixing your energy deal now means you can opt out of these rises entirely.
“Households can currently lock in a rate that undercuts the July cap by around £250 for the average home. For anyone still on a standard tariff, your bill will go up unless you act.”