Household energy prices are set to increase by 13% from July 1, 2026, as Ofgem announces a rise in the price cap driven by ongoing conflict in the Middle East. The average household using both electricity and gas will see an additional £18 per month on their bills, with gas costs rising 24% and electricity by 5%.
Ofgem's Statement on Price Cap Increase
Ofgem chief executive Tim Jarvis stated: “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.” He added that while energy use typically falls over summer, households can manage costs by exploring fixed tariffs, changing payment methods, or taking advantage of smart meter offers for cheaper weekend electricity. Jarvis emphasised the need for investment in the energy network to ensure long-term security and resilience.
Government Response
Energy Secretary Ed Miliband described the rise as “deeply unwelcome news,” noting that it stems from a war not of Britain’s choosing. He stressed that easing the burden is the government’s top priority and highlighted plans to monitor the situation ahead of winter. Miliband reiterated the need to de-escalate the conflict to reduce oil and gas prices and called for accelerated investment in clean, homegrown power to avoid future price spikes. He also pointed to the government’s record investment in home upgrades ahead of winter.
Industry and Consumer Reactions
Ned Hammond, deputy director of customer policy at Energy UK, warned that the scale of the rise will concern millions, especially if bills remain high through winter. He urged the government to target support to the most vulnerable customers. The price cap, which sets a maximum unit price for gas and electricity, currently leaves 40% of accounts on fixed tariffs unaffected by this rise. However, Gillian Cooper of Citizens Advice called for the delayed energy debt relief scheme to be implemented urgently, alongside better targeted support for families, disabled people, and renters.
Impact of Middle East Conflict
Energy costs have surged due to Iran’s blockade of the Strait of Hormuz, a critical route for a fifth of global oil and gas. Cornwall Insight forecasts that the October cap will remain at similar levels even if the conflict ends soon, due to infrastructure damage and supply disruptions. Campaigners warn of an “extremely difficult winter” for vulnerable households without additional support. Despite mounting calls for action, Chancellor Rachel Reeves did not include immediate energy measures in her recent cost-of-living plan.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, highlighted the human impact: “Behind every energy price rise are households whose direct debits are about to rise, families whose energy debt is harder to clear, and pensioners whose summer is already overshadowed by the winter ahead.” He noted that energy industry profits exceeded £3 billion in the first quarter of 2026 and urged the government to act before September, calling for a permanent shift away from gas dependency.
