Millions of households in England, Scotland, and Wales are being advised to submit energy meter readings as the regulator Ofgem's latest price cap takes effect, leading to a 13% increase in typical energy bills.
The price adjustment, driven by higher wholesale gas costs, is expected to have a potentially limited immediate impact due to warmer summer weather and reduced energy consumption. However, analysts warn that the effects of global conflicts, particularly the war between the US and Iran, are likely to sustain elevated energy prices into the winter.
Cornwall Insight, a consultancy, has predicted only a minor 0.5% dip in Ofgem's price cap for October. This forecast adds pressure on the government to provide targeted support for vulnerable households. Ministers have pointed to previous reforms aimed at reducing bills, and the Chancellor has indicated potential autumn support measures.
Analysts note that the temporary ceasefire between Iran and the US provided some market relief, but this is viewed as a pause rather than a resolution. The terms of any future agreement will significantly influence long-term energy price stability. "Even in the best-case scenario, the enduring effects from the conflict will be with us for a while," said Craig Lowrey, principal consultant at Cornwall Insight.
Consumers who do not have smart meters are encouraged to take a reading of their energy meter to ensure their current usage is recorded at the previous, lower rate, thereby avoiding charges calculated at the new, higher price cap. The price cap set by Ofgem limits the amount suppliers can charge for each unit of gas and electricity used.