Millions of households across the UK are set to see energy bills rise again this summer after Ofgem confirmed a sharp increase to the energy price cap.
From July 2026, a typical household on a standard variable tariff will pay around £221 more a year, bringing average annual bills to £1,862. The increase follows a surge in wholesale gas prices linked to the ongoing conflict involving Iran, Israel, and the United States.
The rise comes only months after bills had started to fall slightly earlier this year, highlighting how vulnerable UK energy prices remain to global events.
Why global conflict affects UK energy bills
Although the UK does not import most of its energy directly from Iran, energy markets operate globally.
One of the main concerns is the Strait of Hormuz, a major shipping route through which around a fifth of the world’s oil and gas supplies typically pass.
Following recent military escalation in the region, disruption to shipping routes has pushed wholesale gas prices sharply higher.
Wholesale gas costs make up a significant proportion of household energy bills. When suppliers pay more for energy, those costs are often passed on to consumers through higher tariffs and price cap increases.
According to the latest reports, wholesale gas prices have risen by around 25% since the conflict escalated.
What the new price cap means for households
Ofgem’s energy price cap limits the maximum amount suppliers can charge customers on standard variable tariffs for each unit of gas and electricity. The new cap, which applies from July to September 2026, will affect around 33 million households across England, Scotland, and Wales.
Under the new rates:
- Typical annual household bills will rise from £1,641 to £1,862
- Gas prices are expected to rise by around 24%
- Electricity prices are expected to rise by around 5%
- Standing charges will remain broadly similar.
However, the exact amount households pay will still depend on how much energy they use. Around 40% of households on fixed tariffs will not see immediate changes until their current deal ends.
Could prices rise further later this year?
Possibly. Some suppliers and industry experts are warning that prices could rise again during the autumn and winter if tensions continue and wholesale markets remain unstable.
That is particularly concerning because households typically use much more energy during colder months.
The latest increase is also a reminder that UK households remain heavily exposed to global gas markets.
While bills are still below the peak levels seen during the 2022–2023 energy crisis, average households are still paying significantly more than they were before that period.
Should households fix their energy tariff?
Some consumer experts are again encouraging households to compare fixed tariffs carefully, particularly where deals are priced below the upcoming July cap.
However, the market remains volatile, and suppliers may continue adjusting or withdrawing deals quickly.
Before switching, households should consider:
- Whether the fixed tariff is genuinely cheaper than projected variable rates
- Exit fees or penalties
- The length of the contract
- Whether they are likely to move home or change energy usage significantly.
Ofgem has also encouraged consumers to look at practical ways to reduce usage, including improving insulation, reducing draughts, and reviewing heating habits.
With winter still ahead, many households may once again face difficult decisions about energy use and affordability later this year.
