UK households are set to face significantly higher energy bills this summer as the energy price cap rises by 13% from July 1, 2026. This increase, driven by the ongoing conflict in Iran and its impact on global fuel markets, will add approximately £18 per month—or £221 annually—to the average household's energy costs.
When Does the Price Cap Rise?
Ofgem, Britain's energy regulator, confirmed that the price cap will increase from July 1. Gas bills will surge by 24%, while electricity bills will rise by 5% for a typical household. This follows a period of relief in April, when the cap was lowered by about £117. However, the cap is reviewed quarterly and is heavily influenced by global events, particularly the blockade and instability around the Strait of Hormuz, which has driven up prices for fuel and liquefied natural gas.
Reasons Behind the Increase
The Iran war has created significant volatility in global energy markets, leading to higher wholesale gas prices. Ofgem chief executive Tim Jarvis stated: '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.' He added that while energy use typically falls over summer, households can take steps to manage costs, such as exploring fixed tariffs or changing payment methods. Smart meter customers may also benefit from cheaper weekend electricity.
Martin Lewis, founder of Money Saving Expert, explained on his BBC podcast that the April reduction of 7% is now permanently factored into bills. The July hike of 13% would have been even higher—around 7% more—had the government not made policy changes in April. He noted that the price would have risen from a higher base without those adjustments.
What Is the Energy Price Cap?
The energy price cap is a regulatory limit set by Ofgem, introduced in January 2019 to protect consumers on standard variable tariffs from excessive prices. It limits the amount suppliers can charge per unit of gas and electricity, as well as the daily standing charge. The cap applies to most households in England, Scotland, and Wales on default tariffs and is reviewed every three months.
Reactions to the Price Cap Rise
Energy Secretary Ed Miliband described the increase as 'deeply unwelcome news for households' and attributed it to 'a war we did not choose.' He emphasized the need to de-escalate the conflict to lower oil and gas prices and called for learning lessons from the fossil fuel crisis. Simon Francis, coordinator of the End Fuel Poverty Coalition, warned that behind every price rise are households facing higher direct debits, mounting energy debt, and pensioners anxious about the coming winter. He noted that energy companies have posted over £3 billion in profits from UK operations in early 2026, while rising costs will wipe out any chance for households to reduce debt before winter. Additionally, energy providers have raised concerns about 'out of control' energy debt, which could add an extra £75 to bills for around five million households.
