UK households are being warned of the exact date energy bills will rise by over £200. The new price cap, set at £1,862 a year on average for a typical dual-fuel household, will take effect on July 1. This represents an increase of approximately £221 annually, or 13.5%, which is higher than previously estimated by industry insiders.
Ofgem Confirms New Price Cap
The energy regulator Ofgem confirmed the new cap on May 17, which will remain in place until September 30. The rise is attributed to higher wholesale gas prices, driven by the ongoing conflict in the Middle East. However, prices are still well below the peak of the energy crisis in 2022, when the government intervened to cap bills at £2,500.
Impact on Electricity and Gas Bills
Customers will see a smaller price increase of around 5% on their electricity bills compared to gas bills, which are rising by 24%. This difference reflects the increased amount of renewable generation in the system, reducing reliance on gas for electricity production. The current price cap for a typical household paying by direct debit for both gas and electricity is £1,641.
Based on typical energy use, from July the price cap will rise by £18 per month, equating to £216 annually for the average household using both electricity and gas, if this level were sustained for a year.
Expert Reactions
Speaking to Newspage, Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, commented: "This is another reminder that inflation is not just a number on a chart, it is lived through household bills. A 13% rise in the price cap will put renewed pressure on inflation, particularly because energy feeds into almost everything: transport, food production, business costs and consumer confidence."
Moustafa added: "For households, the impact is immediate. Many people have already used up their financial buffer after years of higher mortgage payments, rent, food and insurance costs. Another £18 a month may sound manageable on paper, but for families already budgeting to the pound, it matters."
Business Implications
Businesses will also feel the impact, especially small firms with tight margins. Higher energy costs can either reduce profitability or be passed on through prices, which risks keeping inflation stickier for longer. The wider consequence is behavioural: people delay spending, reduce saving, avoid moving home, and become more cautious. That caution then filters into the wider economy.
