Households across the UK are being warned to expect higher energy bills this winter. Wholesale natural gas prices are currently at three-year highs, which could lead to increased costs for both businesses and consumers.
The European benchmark natural gas price reached over €75/MWh on Wednesday, its highest level since late 2022. Similarly, natural gas prices in the UK this week topped 185p per therm, also the highest since late 2022.
This price surge follows a return to hostilities between the US and Iran, with analysts concerned the Strait of Hormuz will remain closed. Hamad Hussain, senior climate and commodities economist at Capital Economics, does not expect the waterway to reopen until early 2027.
The energy price cap is due to rise by 4% in October, meaning a typical household will pay £1,723. Furthermore, analysts at Cornwall Insight have forecast that domestic energy prices could increase by an additional 9% in the new year.