Household energy bills in Great Britain are predicted to soar by £276 a year for the typical household from January. This increase is attributed to the ongoing impact of the Middle East war, which is expected to continue through the winter months.
According to figures from forecaster Cornwall Insight, the government’s cap on energy prices is poised to jump by 16%. This would take the average annual dual-fuel bill to the equivalent of £1,999.
This projected increase for the January to March quarter is higher than the consultancy's previous prediction of a 9% rise. Analysts have linked the uptick to the recent rise in gas market prices, which have reached three-year highs.
Gas prices in Europe have doubled in recent months as the continent prepares for cooler weather, with gas stores at their lowest level in 13 years. This follows the US-Israel war on Iran, which triggered an increase in global market prices. Buyers have delayed refilling storage facilities after a cold end to last winter and extra gas power generation during summer heatwaves depleted stocks, while oil and gas exports from the Gulf remain severely disrupted.
This gloomier outlook for energy bills comes as millions of households are already bracing for a 4% rise in energy charges from Thursday. The quarterly energy bill cap, set by regulator Ofgem, will climb to its highest level in three years this winter. The unit cost of electricity will rise from 26.11p to 26.32p per kilowatt hour, and gas charges will increase from 7.33p to 7.97p, equating to £1,723 a year for a typical home's gas and electricity use. Actual household bills will vary based on consumption.