Customers of major energy firms including British Gas, EON, and EDF will pay £221 more per year for gas and electricity from Wednesday, July 1, as Ofgem’s latest price cap takes effect. The increase, which applies to households not on fixed deals, raises the typical annual bill to £1,862, a 13% rise.
Price Cap Details and Impact
Ofgem announced the price cap for July 1 to September 30, reflecting a 13% increase. Electricity unit rates rise from 24.67p to 26.11p per unit on average, while gas increases from 5.74p to 7.33p per unit. The cap affects the majority of bill payers who are not on fixed tariffs, though switching to a fixed deal that undercuts the cap may offer savings.
The increase was widely anticipated due to conflict in the Middle East, which has driven up wholesale gas costs—the key metric for UK energy pricing. Ofgem chief executive Tim Jarvis defended the rise, stating: “Today’s price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy.”
Industry and Political Reactions
Nigel Pocklington, chief executive of Good Energy Group, called for market reform, saying: “Over the past five years, we have witnessed a series of energy shocks due to conflict abroad, proving that our current system is neither fit for purpose nor structured in a fair way for households to pay for their energy.” Good Energy’s report, Rewiring the Market: How to Tackle the Hidden Causes of High Energy Bills, urges the government to move policy costs off bills into general taxation, break the link between gas and electricity prices, and incentivise clean energy investment with Bank of England loans.
Susannah Streeter, chief investment strategist at Wealth Club, noted: “The rise in the energy price cap in the UK from July is set to weigh on already fragile consumer confidence. Household energy prices will rise by 13% due to soaring wholesale costs, a highly unwelcome change, just as bills had been reducing.” She added that higher energy costs could reduce discretionary spending on dining, holidays, and retail, raising concerns for businesses reliant on consumer spending.
Energy Secretary Ed Miliband commented: “The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country. We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority.” He emphasised the need to de-escalate the conflict and accelerate clean homegrown power to avoid future price spikes.
Ned Hammond, deputy director of customer policy at Energy UK, said: “A rise of this scale will already be a concern for millions of customers but such worries will be magnified if bills remain at this level – or higher – over the winter months.” He urged the government to target support for the most vulnerable customers later in the year.
