UK (Parliament Politics Magazine) – Energy bills in Great Britain will rise 2% from October as Ofgem lifts the cap to £1,755, adding £35 to annual costs for 9 million households.
As reported by The Guardian, millions of UK households are expected to face higher energy bills this autumn as the dual-fuel price cap rises by 2% to £1,755.
How will Ofgem’s price cap rise affect UK households this winter?
Britain’s energy watchdog Ofgem will raise the gas and electricity price cap from October, adding just over £35 a year to the average household bill, driven by rising European gas prices.
The slight rise comes after a brief summer dip, when the cap fell 7% in July to £1,720 due to easing market prices.
Energy consultancy Cornwall Insight says the warm home discount expansion will add about £15 to average household bills.
Nearly 9 million households on variable energy tariffs will feel the impact when the cap takes effect in October. Extra usage could drive bills even higher. The cap is reviewed every three months. It restricts the rate suppliers can charge per unit of gas and electricity, not the overall bill.
Energy costs are climbing again, with the average household facing annual bills £600 higher than before Russia’s 2022 invasion of Ukraine sent prices soaring. The latest increase in the energy price cap is expected to reignite debate over affordability, as households prepare for colder months.
Official data shows UK household energy debts reached a record £4.15bn by the end of last winter. Debt and arrears have risen over the past two years, despite bills stabilising since 2022’s peak.
The surge in household energy costs comes as Chancellor Rachel Reeves prepares to raise taxes in the Budget to manage rising government debt.
What did Labour say about rising energy bills and Nigel Farage?
Labour reacted to the price cap rise, blaming high costs on the previous government’s renewable energy policies. The party also criticised Reform leader Nigel Farage’s plans to reduce focus on clean energy.
A spokesperson stated,
“Energy bills soared under the Conservatives because they tied our country to the fossil fuel rollercoaster, and working people are still paying the price. From banning onshore wind to failing to deliver new nuclear, their reckless decisions left Britain exposed to wholesale gas prices that are still 75% higher than before Putin’s invasion of Ukraine.”
They said,
“That’s why Nigel Farage’s unpatriotic war on clean energy would be a total disaster for families, businesses and our economy. His destructive plans would push bills higher, kill nearly a million jobs and scrap billions of pounds of vital investment across the country that will strengthen our energy security,” adding, “This Labour government’s plan for change is protecting consumers with 3 million more families getting £150 off their bills through the warm home discount, a total of 6 million in all, as we continue to invest in clean homegrown power to bring energy bills down for good.”
What did Ofgem say about energy bills and market volatility?
Tim Jarvis, Ofgem’s markets director, said energy bills have dropped about 60% since Russia invaded Ukraine.
He stated,
“I think we’re looking at a period of stabilisation of prices. It’s very difficult to predict what’s going to happen to prices when we’re still so reliant on an international gas market that’s very volatile.”
Mr Jarvis said,
“We’ve seen that volatility reduce this quarter, but it is susceptible to the changes, for example, in tariff policy by the US government or even strikes in other parts of the world.”
He added,
“It is a very volatile market, and that’s why we need the investment to get off the reliance on international markets and a homegrown clean energy system, which is what the investment in the network was about.”
What did Dr Craig Lowrey say about the impact of rising energy bills?
Dr Craig Lowrey of Cornwall Insight stated,
“The rise in bills, however small it may look on paper, will feel very real for households as we head into the colder months.”
He said,
“The increase in costs is in part due to the widely supported expansion of the Warm Home Discount. This will be a lifeline for many of the 2.7 million additional households now eligible for support, but for those still facing high bills, it will offer little comfort. The reality is, when we give more help to those who need it most, we all end up sharing the cost.”
Mr Lowrey said,
“There is better news on the horizon with bills currently expected to ease in January, driven by a forecast fall in wholesale prices. Normally, that drop would have meant even lower bills; however, rising policy costs, such as funding for new nuclear projects, are keeping bills a little higher.”
He added,
“These policy-driven costs are part of a broader shift in how we fund the energy transition. Nuclear will be one of the cornerstones of a more secure and sustainable energy system, yet some of the funding will ultimately need to come from billpayers. This is a difficult trade-off – after all, everyone wants to see bills come down. However, the challenge we face is clear: if we want to build a resilient, low-carbon energy future, we must be prepared to invest in it today.”
Michael Shanks’ views on rising bills and family support
Energy minister Michael Shanks stated,
“We know that any price rise is a concern for families. Wholesale gas prices remain 75% above their levels before Russia invaded Ukraine. That is the fossil fuel penalty being paid by families, businesses and our economy.”
He said,
“That is why the only answer for Britain is this government’s mission to get us off the rollercoaster of fossil fuel prices and onto clean, homegrown power we control, to bring down bills for good.”
Mr Shanks added,
“At the same time, we are determined to take urgent action to support vulnerable families this winter. That includes expanding the £150 warm home discount to 2.7m more households and stepping up our overhaul of the energy system to increase protections for customers.”
What Did the Energy Department Say About Cutting Bills and Winter Support?
A Department for Energy Security and Net Zero spokesman stated,
“The only way to bring down energy bills for good is with the Government’s clean energy superpower mission, which will get the UK off the rollercoaster of fossil fuel prices and on to clean, homegrown power that we control.”
They added,
“We are taking urgent action to support families this winter – in addition to expanding the £150 Warm Home Discount to 2.7 million more households, we are strengthening customer protections, including by giving people quicker and easier access to automatic compensation when their suppliers let them down.”
Duties of Ofgem
Ofgem ensures fair prices and reliable service for all energy consumers, with special protection for vulnerable groups. It promotes competition and encourages new suppliers to enter the market.
The regulator works to secure a reliable energy supply while supporting the transition to net-zero emissions. It also enforces compliance, sets price controls for networks, and takes action against firms that violate rules.