Household energy bills across Great Britain are forecast to climb to a three-year high this winter, as the impact of the war in the Middle East wipes out prime minister Andy Burnham's promised tax cut on electricity bills. Analysis by consultancy Cornwall Insight suggests the regulator's price cap will rise by 4% from October to £1,729 a year, the highest quarterly level since July 2023, with soaring international gas prices compounded by increased use of gas power plants during European heatwaves. Analysts warn the rise could hit struggling households hard just as winter approaches, and highlight Britain's continued dependence on imported gas as the underlying vulnerability.

Under the forecast, electricity rates would rise from 26.11p to 26.57p per kilowatt hour and gas charges from 7.33p to 7.90p for direct debit customers, taking the typical dual-fuel bill to £1,729 under the regulator's revised calculation method (£1,940.69 under the previous methodology, up from £1,862 this quarter). This increase is expected to more than offset Burnham's planned VAT cut on household electricity, which was meant to save around £45 a year. Cornwall Insight expects a further rise in January, while experts from the Energy and Climate Intelligence Unit noted wholesale gas prices have hit a near four-year high and warned the UK still lags European neighbours in reducing gas dependence through measures such as heat pumps.