Iran War Set to Drive UK Energy Bills to 3-Year High
UK household energy bills are set to further rise from October by 4% to their highest level since the summer of 2023, as the Iran war has tightened global gas supply and made gas restocking in Europe more difficult and expensive, Cornwall Insight said on Wednesday. The energy consultancy expects Britain’s energy regulator Ofgem to raise the price cap that energy providers can charge by 4% from…
UK energy bills are poised to soar to their highest level since July 2023 due to the ongoing Iran war, according to Cornwall Insight. The consultancy forecasts that Ofgem, the UK's energy regulator, will increase the price cap by 4% from October, potentially raising bills to £1,729 ($2,344) per household annually, up from the current £1,663.
This surge is attributed to a constrained global gas supply, making restocking in Europe costly and difficult. The Energy Price Cap, which shields households from extreme costs, is set to rise to this new level in the October-December period. Energy costs have already climbed by 13% between July and September 2026 due to elevated wholesale gas prices stemming from the Middle East crisis.
Analysts project further hikes as the US-Iran conflict persists, leading to higher LNG supply costs in Europe and Asia. The anticipated rise is compounded by Europe's recent heatwaves, straining gas supplies. The increase in energy expenses has pushed UK inflation to 2.9% in July, the highest in four months, potentially marking the onset of another inflationary cycle.
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