Households are expected to be told that October’s energy bills will rise by about £17 a year, taking the typical bill to £1,737, when Ofgem confirms the price cap. The regulator is due to publish the new cap on 27 August. Cornwall Insight’s latest forecast signals this increase rather than the fall it had predicted in July, when bills were seen dropping from the current £1,720.

The forecast assumes changes expected in the coming cap period, including the expansion of the Warm Home Discount for vulnerable households, which would add around £15 to a typical bill, and £150 in support for about 2.7 million more people.

Cornwall Insight noted that wholesale prices for electricity and gas have been volatile, reflecting geopolitical factors including uncertainty over US trade policy. Dr Craig Lowrey, the firm’s principal consultant, said: “News of higher bills will not be welcomed by households, especially as winter approaches. While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs. It’s a reminder that the price cap reflects more than just the market price of energy. This immediate challenge underscores a broader uncertainty facing millions of households, with current forecasts suggesting a sharp drop in bills is unlikely in the near term. Longer term, Ofgem’s review of how Britain’s energy system costs are distributed could reshape the financial burden on consumers, but while some may see savings, others could face higher charges. The real hope for lasting relief lies in the longer-term transition towards clean power and energy independence, which offers the greatest prospect of both stability and lower costs.”

Ofgem changes the price cap for households every three months, largely based on the cost of energy on wholesale markets. The price cap was introduced by the Government in January 2019 and sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use. It does not limit total bills, because householders still pay for the amount of energy they consume.