Our final price cap forecast for July to September 2026 predicts the cap will rise by £209 to £1,850 a year for a typical household. That’s around a 13% rise from the current cap.
❓ Why are prices going up?
The main driver for the increase in our forecast is rising wholesale prices, which climbed sharply in February and March after US and Israeli missile strikes on Iran, and the subsequent retaliatory attacks, saw damage to Gulf energy infrastructure and the closure of the Strait of Hormuz, a shipping route for around 20% of global oil and gas.
A temporary ceasefire brought some calm to markets, but prices remained elevated throughout the observation window.
❓ What about prices heading into the winter?
While households will be understandably frustrated by a rise during the summer, the impact will be reduced as household energy usage typical falls during the hotter months. The bigger concern is October, when demand picks up again and current forecasts point to a similar cap level as July.
While the October cap will depend on how the Middle East conflict unfolds, even if the conflict were to end tomorrow, the physical damage to infrastructure, and lingering effect of disrupted supply, means a fall back to April’s price cap levels in the autumn looks unlikely.
❓ What is a "typical household" and how might this be changing?
To give people an idea of what an average household may be paying under the price cap
@ofgem has devised Typical Domestic Consumption Values (TDCVs) for gas and electricity. Ofgem is consulting on a change to its TDCVs, to reflect the fact that average household energy use has fallen.
Cornwall Insight has therefore published two forecasts. If Ofgem adopts the lower consumption figures, the headline “average bill” could appear to rise by less - to £1,667. However, as the cap controls unit rates and standing charges, rather than the total bill itself, what households actually pay will depend on how much energy they use and will not be impacted by Ofgem’s “average bill” figure.
Read the full release here:
cornwall-insight.com/press-r…