UK Energy Bills to Hit Three-Year High as October Price Cap Rises 4%
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Energy Secretary Andy Burnham has acknowledged the fresh price cap rise is "difficult" for families, while the Conservatives seized on the increase to accuse Labour of breaking its election pledge to cut bills by £300—bills have instead risen by nearly £400 since the party took power. Ofgem confirmed the price cap will climb 4% from 1 October, adding £60 (£5 a month) to a typical annual bill, taking it to £1,723, the highest level since 2023, and largely offsetting the Government's £45-a-year electricity VAT cut due the same day.
The rise is being driven mainly by higher wholesale gas prices linked to the Middle East conflict and European heatwaves, which have pushed up gas demand for power generation; Uswitch's Richard Neudegg said gas costs for price cap customers are now almost 27% higher than a year ago. Cornwall Insight is forecasting a further 9% jump in January, which would push the annual cap to around £1,872, with analysts warning that easing tensions abroad would not necessarily prevent further increases given depleted winter gas stocks. Consumer groups, including National Energy Action, warned the rises risk plunging more households into fuel poverty, noting over seven in ten fuel-poor households will be especially affected.
- Ofgem price cap rises 4% from October, adding £60 to typical bills
- Burnham calls rise "difficult"; Tories say Labour's £300 cut pledge broken
- Cornwall Insight predicts a further 9% rise in January, to about £1,872
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Rising bills stem from the energy price cap, a limit Ofgem sets on what suppliers can charge for a typical household's gas and electricity. The cap moves up or down roughly every three months based mainly on wholesale energy prices, meaning it does not stay fixed and can change repeatedly within a single year, as has happened again now.
Ofgem is the independent regulator responsible for setting this cap and overseeing the energy market on behalf of consumers. Wholesale gas prices, largely dictated by international markets and global events, are a major factor behind the cap's level, since the UK relies heavily on gas both for heating and for generating electricity.
This matters because the cap directly affects what millions of households pay for energy each year, and successive rises add pressure to already stretched household budgets. It also raises questions for the government about whether further support is needed, given that the underlying cause lies largely in global market conditions rather than domestic policy.
Coverage
- The Guardian — UK energy secretary says looking at ‘what more we can do’ as typical annual bill rises to £1,723 from October – business live
- The Guardian — Britons to face highest price cap in three years as energy bills rise 4% from October