Starting in July, the annual energy bills for typical UK households using both gas and electricity will increase by hundreds of pounds.
The UK energy regulator, Ofgem, has announced a 13% rise in the energy price cap for households, raising the annual limit for an average home from the previous £1,641 to £1,862.
For ordinary households on their supplier's standard default tariff, this translates to an additional £18 per month. This marks the first time since January 2024 that annual energy bills have reached this elevated level.
The increase is primarily driven by higher wholesale energy prices, exacerbated by geopolitical tensions in Iran. For the first time, residents in England, Scotland, and Wales are feeling the impact on their bills. The conflict has disrupted traffic through the Strait of Hormuz, a critical global oil and gas transit route handling about 20% of the world's shipments. Wholesale energy prices began climbing in February and surged sharply in March.
However, the pressure from this price hike is expected to be relatively milder compared to winter months, as warmer summer temperatures typically lead to reduced demand for electricity and gas in UK households.
The UK energy price cap is adjusted every three months, setting a maximum unit price that energy suppliers can charge. Consequently, households with higher energy consumption will likely see actual costs exceeding the announced average standard amount.
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