Energy bills for millions of households are expected to rise this winter to their highest level in three years. The industry regulator, Ofgem, is set to announce a new price cap on Wednesday, which will reflect an increase in the wholesale cost of gas.
Analysts anticipate a 4% increase compared to the current cap, affecting customers on variable tariffs in England, Scotland, and Wales. This rise will impact bills from October until the end of December.
The consultancy Cornwall Insight forecasts that a typical household paying by direct debit will pay £1,729 a year from October, up from £1,663 between July and September. This increase is driven by volatility in international wholesale gas prices, with the average price of gas being 61% higher over the past three months compared to late 2025.
The government plans to cut VAT from electricity bills in October, which could reduce a typical annual bill by about £50. Energy firms have reported a jump in energy debt and are calling for more support for those struggling to pay.