UK Energy Price Cap Rises by £200 from July
Good morning and welcome to our rolling coverage of business, financial markets and the global economy. The energy price cap in Great Britain will increase by 13% from July, the regulator Ofgem has announced this morning. This means households will face the steepest summer rise in energy charges in four years, following months of soaring market prices.
Under the cap, the average gas and electricity bill will rise to the equivalent of £1,862 a year, up from £1,641, from July until the end of September. This adjustment accounts for the increase in global energy market prices driven by the conflict in the Middle East.
How the Price Cap Works
Ofgem, the energy regulator for Great Britain, sets the maximum a supplier can charge for each unit of gas and electricity based on the cost of supplying energy to homes. This includes the average wholesale market costs in the months leading up to the start of each new cap. The cap also incorporates the maximum daily standing charge, a flat daily fee for connection regardless of usage.
Ofgem CEO Comments
Tim Jarvis, Ofgem CEO, 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.”
Key Events Today
- 5am BST: European car sales data for April
- 7am BST: Ofgem price cap for 1 July to 30 September
- 5pm BST: Deadline for any legal challenge of FCA motor finance compensation to be filed
