Households across the UK could face another increase in energy costs later this year, with analysts forecasting that the average annual gas and electricity bill may rise by £209 from July 2026.
According to Cornwall Insight’s latest forecast, the energy price cap for a typical dual-fuel household could increase from the current £1,641 to around £1,850 between July and September 2026. The projected rise represents an increase of roughly 13%.
Although warmer weather during summer months may reduce overall household energy usage, analysts warn that the broader outlook remains uncertain, particularly heading into autumn and winter when demand usually increases.
Forecast
The energy price cap, regulated by Ofgem, limits the maximum unit rates and standing charges suppliers can charge customers on default tariffs. It does not cap total household bills directly, since actual costs depend on energy consumption.
Cornwall Insight’s latest projection suggests that continued pressure in global energy markets has pushed expected prices significantly higher than earlier forecasts.
The following table compares the current and projected annual costs:
| Period | Typical Annual Bill |
|---|---|
| Current Cap | £1,641 |
| Forecast July-September Cap | £1,850 |
| Estimated Increase | £209 |
The forecast applies to a typical dual-fuel household paying by direct debit under the default tariff system.
Markets
Global energy prices rose sharply earlier this year following geopolitical tensions in the Middle East.
According to market analysts, missile strikes involving the United States, Israel, and Iran disrupted energy infrastructure across the Gulf region. The closure of the Strait of Hormuz, a key shipping route responsible for transporting roughly 20% of global oil and gas supplies, added further pressure to international markets.
Although a temporary ceasefire later eased some concerns, wholesale gas and oil prices remained elevated.
Energy suppliers purchase fuel in advance, meaning periods of market volatility can continue affecting consumer bills for months after the initial disruption.
Summer
Despite the projected increase, actual summer energy spending may not rise as sharply for some households because energy usage typically declines during warmer months.
Heating demand usually falls between July and September, which can reduce overall bills even when unit prices increase.
However, experts note that the more significant concern may come later in the year when colder temperatures return.
| Season | Typical Household Usage |
|---|---|
| Summer | Lower heating demand |
| Autumn | Usage begins rising |
| Winter | Highest energy consumption |
If wholesale prices remain elevated into autumn, households could face sustained pressure during the colder months when energy use is naturally higher.
October
Cornwall Insight has indicated that current forecasts for October 2026 point toward a price cap level similar to the expected July increase.
While future pricing will depend partly on developments in the Middle East and global supply conditions, analysts believe a rapid return to lower energy prices appears unlikely in the near term.
Even if geopolitical tensions ease, damage to infrastructure and ongoing supply disruptions may continue affecting wholesale markets.
That means households hoping for a return to April’s lower cap levels before winter may face disappointment.
Ofgem
At the same time, Ofgem is reviewing how it measures average household energy consumption.
The regulator is consulting on updates to its “typical domestic consumption values,” which are used to estimate average annual bills. Officials say average household energy use has declined in recent years due to improved efficiency, changing consumer habits, and higher energy awareness.
This change would not directly affect how much households pay, but it could alter how average bill figures are presented publicly.
The current price cap system works as follows:
| Price Cap Feature | Explanation |
|---|---|
| Caps unit rates | Yes |
| Caps standing charges | Yes |
| Caps total bill | No |
| Depends on household usage | Yes |
As a result, households that use more energy than average may pay significantly above the published “typical” bill figures.
Budgeting
With energy costs expected to remain volatile, many households may continue focusing on ways to manage consumption and reduce monthly expenses.
Common strategies include:
- Improving home insulation
- Using smart thermostats
- Reducing standby electricity use
- Comparing fixed and variable tariffs
- Monitoring daily energy usage
Some households may also review eligibility for government support schemes or supplier assistance programs during periods of higher costs.
Outlook
The latest forecast highlights how global events continue to influence domestic energy prices across the UK. While summer usage patterns may soften the immediate financial impact for some households, the possibility of sustained higher prices into autumn and winter remains a concern.
Much will depend on future wholesale market conditions, geopolitical developments, and energy demand later in the year. For now, analysts suggest that significant reductions in household energy costs are unlikely in the short term.
FAQs
How much could UK energy bills rise?
Forecasts suggest an increase of £209 yearly.
What is the new projected price cap?
Around £1,850 annually for typical households.
Does the price cap limit total bills?
No, it limits unit rates and charges.
Why are wholesale energy prices rising?
Global tensions disrupted oil and gas supplies.
