Martin Lewis has indicated that households across the UK could receive "good news" regarding energy bills in the coming days, despite a scheduled rise of over £200 in July. The MoneySavingExpert.com founder pointed to a recent peace deal in the Middle East as a key factor that has already driven down natural gas prices.
Energy Price Cap Increase
Energy bills for typical dual-fuel households in the UK are set to increase by 13 per cent from July 1, 2026. Ofgem, the industry regulator, has confirmed that the energy price cap will rise from the current £1,641 per year to £1,862 per year for a typical household paying by direct debit. This translates to an average increase of around £221 per year, or approximately £18 per month, compared to the spring quarter.
Impact of Middle East Peace Deal
However, the announcement of a deal to end the conflict in the Middle East has already had a positive effect on energy markets. The US, Israel, and Iran have reached an agreement to cease operations on all fronts, effectively ending the Iran war. This has alleviated fears over the potential closure of the Strait of Hormuz, a critical chokepoint for global oil and gas supplies, thereby reducing costs for essential resources.
According to figures shared by Lewis, natural gas prices have dropped by almost two per cent. Meanwhile, the price of Brent crude oil has fallen by around four to five per cent, to approximately 82 dollars per barrel.
Lewis's Statement
Lewis commented: "The US and Iran signing a framework deal has pushed natural gas prices down. These wholesale prices are a key driver of UK gas and electricity bills. As the six-month graph shows, though, prices still have a long way to fall before returning to pre-conflict levels."
He added: "The good news is this could lead to slightly cheaper fixed tariffs being launched in the coming days. However, without substantial further drops the October price cap still looks likely to be significantly higher than it is today."
Mortgage Rates Also Affected
Adam French, head of consumer finance at Moneyfactscompare.co.uk, also weighed in on the potential broader economic impact. He said: "While we are far from being out of the woods yet, a lasting peace deal should dramatically reduce the risk of the Bank of England’s worst-case scenario for inflation and interest rates becoming a reality."
Under that worst-case scenario, the base rate could have risen to 5.25 per cent, potentially pushing typical rates on new mortgages towards 6.75 per cent. French noted: "Instead, today’s news means mortgage rates, which have already been slowly falling for several weeks, have likely already passed their peak – at least until the next unwelcome crisis."
He concluded: "Borrowers can be optimistic but with a word of caution, as inflation and economic data will continue to influence the outlook. However, a lasting peace should remove one of the biggest risks to mortgage costs and may help restore a more stable environment for hard-pressed remortgage borrowers and prospective buyers."
