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UK energy price cap set to rise 4% this October
Analysts at Cornwall Insight forecast the cap reaching the equivalent of £1,729 a year for the final three months of 2026, with Ofgem set to announce the new pricing next Wednesday.
Energy market prices in Britain are expected to push the government’s household energy price cap up by 4% from October, a move forecast to lift bills to a three year high for the last three months of 2026, according to analysis by the energy consultancy Cornwall Insight.
The consultancy said the forecast quarterly increase would likely erase the effect of the prime minister’s promised VAT cut on household electricity bills from October, which was intended to reduce bills by an average of £45 a year. Cornwall Insight attributed the higher cap to soaring energy market prices tied to the Middle East war and to additional use of expensive gas in power plants during European heatwaves.
Cornwall Insight also estimated that electricity rates would rise from 26.11p per kilowatt hour to 26.57p, while gas charges would increase from 7.33p to 7.90p for households.
Ofgem is due to set the next price cap next Wednesday, using its method based on the maximum price of each unit of gas and electricity and the average wholesale market costs in the months leading up to the new cap start date.