Household energy bills set to rise by £209 from July amid Middle East crisis
Soaring wholesale costs caused by the conflict in Iran are expected to push up household bills by 13 per cent.
Listen to this article
The household energy price cap, which limits how much suppliers can charge for each unit of gas and electricity, could rise from £1,641 to £1,850, analysts at Cornwall Insight said this morning.
The consultancy firm said its prediction for Ofgem’s cap from July to September for a typical dual fuel household will see an increase of 13 per cent on April’s annual cap.
The £209 increase is less than what analysts previously estimated in early March, when they predicted bills could surge by £332.
Read more: Youth unemployment nearing Covid and 2008 levels with decline 'setting off alarm bells'
Read more: Number of UK renters crowdfunding to meet housing costs hits record levels
Dr Craig Lowrey, principal consultant at Cornwall Insight: “A summer rise will be painful for households, but the bigger concern is October when household demand traditionally picks up.
“If the cap stays at a similar level as July, that is when the Government will need to think seriously about targeted support for the most vulnerable.”
However, the energy consultancy said the “biggest concern” was what would happen to the price cap in October, when energy demand rises as temperatures drop, adding that current forecasts point to a similar level as July.
Ofgem adjusts its price cap every three months and will announce the next level on May 27.
Richard Neudegg, director of regulation at Uswitch.com, said: “Thankfully, households can opt out of this price rise if they act now.
“The expected 13% rise to energy bills is completely avoidable. A number of fixed tariffs currently undercut the predicted price cap, some by over £200 for the average home.”
As the conflict in Iran rages on, households in the UK are feeling the knock-on effect on their wallets.
Energy bills aren't the only thing sparking misery across the country; food prices are also set to spike by 50 per cent by the end of the year compared to when the cost of living squeeze started.
Meanwhile, unleaded petrol is up 19.2 per cent and diesel has increased by 34.5 per cent since the Iran war started, the Royal Automobile Club has revealed.