Forecast energy price cap rise in Britain could push UK fuel bills up 4% this winter
Summary
Household energy bills in Great Britain are expected to rise by about 4% this winter, reaching their highest level in three years. The increase, driven by higher global gas prices linked to the Middle East conflict, will outweigh the government's cut of VAT on electricity bills.Key Facts
- The energy price cap will rise to around £1,729 per year from October 2024 through early 2026.
- This is a 4% increase and the highest energy price cap since July 2023.
- Rising gas prices, influenced by the Middle East war and higher gas use during European heatwaves, are pushing bills up.
- The government plans to reduce VAT on electricity bills starting in October to lower costs by about £45 per year.
- The VAT cut will not fully cancel out the overall rise in energy bills.
- Ofgem, the UK energy regulator, sets the price cap based on wholesale gas and electricity costs.
- Energy consultants warn that UK households’ reliance on imported gas makes them vulnerable to global price changes.
- There could be further bill increases from January 2025 if gas prices stay high.
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