UK Energy Price Cap Forecast to Rise 18% in July 2026 Due to Wholesale Costs

The Ofgem price cap for a typical dual fuel household is expected to rise to £1,929 per year starting July 1, 2026.

This marks an 18% increase from the current level of £1,641 annually. ON, OVO Energy, and Octopus Energy. Forecasts from Cornwall Insight indicate the change is driven by rising wholesale energy costs observed in March 2026.

These costs are connected to geopolitical tensions involving Iran in the Middle East. Ofgem is scheduled to confirm the new cap by May 27, 2026. The price cap applies to households in England, Wales, and Scotland on standard variable tariffs.

Vulnerable groups, such as those off the gas grid or using heat networks, face heightened impacts.

experienced a 7% reduction in bills effective April 1, 2026, lowering annual costs by £117 to £1,641.

This decrease provided temporary relief following prior increases. Energy analysts note that the upcoming July rise appears unavoidable due to sustained wholesale price pressures. Craig Lowrey, principal consultant at Cornwall Insight, stated that wholesale prices show limited expectation of significant near-term declines.

“A rise in July is pretty much unavoidable, but how high prices go remains to be seen.”

Lowrey added that summer timing may mitigate effects, as energy demand reaches its annual low.

The End Fuel Poverty Coalition highlighted risks to households in energy debt, estimating the rise could exacerbate financial strain for millions. The group linked the increase to Middle East conflicts affecting oil and gas prices. It called for government use of windfall tax revenues to support vulnerable consumers.