UK energy price cap rises 4% to £1,723 a year from 1 October

Ofgem's energy price cap rose by 4% on 1 October, lifting the typical annual dual-fuel bill for a household paying by Direct Debit from £1,663 to £1,723. 1 2 The Evening Standard puts the increase at £5 a month, or £60 a year if sustained, and says more than four million homes on a standard tariff are affected. 2 The cap limits unit rates and standing charges on default tariffs but does not limit the total bill, and it applies from 1 October to 31 December 2026. 1

The Daily Mirror reports that Ofgem pointed to volatility in global gas markets as the main cause of the rise. 1 Consumer advice, including from Martin Lewis, Which? and Go.Compare, is to take and submit a meter reading before the change, so that energy used beforehand is charged at the old rate. 1 Cornwall Insight forecasts a further 16% rise to £1,999 a year on 1 January, up £276 and the biggest increase since January 2023. 2

Cornwall Insight attributes this to the Middle East conflict, saying the Strait of Hormuz has been effectively closed since the Iran war began in February. 2 The Government has removed the 5% VAT from electricity bills until 31 March next year, cutting about £45 a year, while gas stays at 5%. Prime Minister Andy Burnham said families need "breathing space now". 2 The End Fuel Poverty Coalition wants an "emergency heat tariff" this winter, and its co-ordinator Simon Francis warned of serious health consequences if ministers do nothing. 2