Household energy prices will rise sharply in July, as soaring wholesale costs caused by the impact of the Iran war hit UK bills for the first time. On Wednesday, regulator Ofgem will publish details of its new price cap affecting millions of homes on variable tariffs in England, Scotland and Wales. Analysts predict a rise of 13% on the current cap, which would mean a household using a typical amount gas and electricity paying £209 a year more than now, with an annual bill of £1,850.
The price cap is set every three months. Domestic energy bills fell by 7% between April and July, following a shake-up in charges by the government. That change was announced just before the outbreak of the conflict in Iran. However the cap from July to September will reflect the 25% increase in the global price of gas caused by the war, particularly the effective closure of the Strait of Hormuz. The government has said it is working on plans to provide targeted support for those most in need before bills become even more expensive into the winter.