Ofgem Energy Bills Jump 13% as Summer Heat Pushes Prices Higher
Energy bills for typical households surged to £1,862 from 1 July as the Middle East conflict drove wholesale costs up. The price cap will be reviewed again in late August ahead of a winter hike forecast.
From 1 July 2026, the Ofgem energy price cap rose by 13%, pushing annual bills to £1,862 per year for a typical Direct Debit household — an increase of £221 from the previous quarter. The hike reflects higher wholesale energy costs triggered by Middle East geopolitical tensions disrupting global oil and gas markets.
Ofgem recalculated average household consumption assumptions on the same date, so bills are also quoted as £1,663 using the new lower baseline. However, most homes with gas heating will pay closer to the higher figure. Analysts predict a further rise in October when the next quarter's cap is announced on 26 August.
What's driving the increase?
- Wholesale gas and oil prices spiked due to conflict in the Strait of Hormuz, raising supplier costs
- New energy-use benchmarks mean unit rates per kilowatt-hour are higher despite lower assumed consumption
- Green levies were moved to general taxation in April (saving roughly £150/year on average), but geopolitical shocks have offset these savings
If you're on a fixed tariff, you're protected until your deal ends. For those on standard variable rates, your bills adjust automatically with the cap. Renters should check their tenancy agreements to see whether the landlord or tenant absorbs energy costs. Expats on tight budgets should consider switching to a fixed tariff now if you haven't already — locking in rates protects you from further quarterly swings.
Sources
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