Energy Bills Set to Jump 13% in July After Brief Spring Dip

Good news for your energy bill this spring was short-lived, as new forecasts predict a sharp 13% increase in gas and electricity costs from July 1, 2026. This means the typical household energy bill, currently enjoying a temporary dip, is expected to jump by around £209, pushing annual costs back up to approximately £1,850.

The Current Picture: A Brief Reprieve

For the current quarter, from April 1 to June 30, 2026, Ofgem set the energy price cap at £1,641 per year for a typical dual-fuel household paying by Direct Debit. This represented a welcome 7% reduction, or £117, compared to the previous three months.

Part of this reduction was down to a government decision announced in the Autumn Budget 2025. The Energy Company Obligation (ECO) and Renewables Obligation (RO) green levies were removed from customer bills, saving households an average of £150. These costs are now funded through general taxation, rather than directly on your energy statement.

The July Hike: What to Expect

However, this relief is not expected to last. Energy prices are widely forecast to rise significantly from July 1, 2026. Energy consultancy Cornwall Insight predicts the July price cap will increase by 13% to £1,850 per year, an uplift of roughly £209.

Other major suppliers and forecasters echo this prediction. Octopus Energy anticipates a July cap of £1,844, while EDF Energy expects £1,847. Sainsbury's Energy also forecasts an increase to £1,849 for the July-September period.

Earlier indications from Cornwall Insight in February 2026 had suggested the July cap would remain relatively steady at £1,645. However, this was before the full impact of geopolitical events became clear, leading to the revised, higher forecasts we see today.

What this means for you

If you're a typical household paying by Direct Debit, your annual energy bill is set to increase by around £209 from July 1, 2026. This means your monthly payments will likely rise from approximately £136.75 (based on the current £1,641 cap) to about £154.17 (based on the £1,850 forecast). This extra £17.42 a month could put a squeeze on your household budget, especially after the temporary relief of the spring cap.

Inflationary Pressures

The Bank of England (BoE) expects these rising household energy prices to contribute to an increase in inflation. The BoE forecasts inflation to reach 3.6% or 3.7% by the end of 2026, reversing some of the recent progress. UK inflation fell to 2.8% in April 2026, down from 3.3% in March, a drop primarily driven by previous energy price reductions.

What Can You Do Right Now?

While you can't control wholesale energy prices, there are steps you can consider taking to manage your usage and costs:

• Check your usage: Understand when and how you use the most energy. Smart meters can provide real-time data to help you identify energy-hungry appliances.
• Energy efficiency: Simple changes like turning off lights, unplugging unused chargers, and ensuring your home is well-insulated can make a difference.
• Review your Direct Debit: Your supplier will likely adjust your payments automatically. Keep an eye on your statements and contact them if you think your payments are too high or too low based on your actual usage.
• Consider a fixed tariff: While the market is volatile, it may be worth checking if any fixed tariffs are available that offer certainty for a period. However, many advisers recommend caution as future price movements are uncertain.

But There Are Risks

Energy price forecasts are inherently volatile and subject to change. Geopolitical events, global demand, and supply issues can all impact wholesale prices, meaning the July cap could still shift. The earlier, lower forecast for July demonstrates how quickly the outlook can change.

Where to Get Help

If you're struggling with your energy bills, don't suffer in silence. Contact your energy supplier directly to discuss payment plans or potential support. Organisations like Citizens Advice and National Energy Action also offer free, impartial advice and can help you explore available grants or benefits.