Households are expected to see energy bills rise by about 1% in October when the price cap is updated, Ofgem has indicated. Ofgem, which sets the maximum charge energy suppliers can levy, is due to confirm the latest cap in the forthcoming revision. Cornwall Insight estimated that a typical annual bill would increase to £1,737, up by £17 from the current £1,720, reversing a July projection that billed would fall by 1%.

The forecast attributes part of the rise to changes the cap is expected to bring, including the expansion of the Warm Home Discount for vulnerable households which could add around £15 to a typical bill, and additional support of £150 to about 2.7 million more people. It notes that wholesale prices for electricity and gas have remained volatile amid geopolitical factors, including ongoing uncertainty over US trade policy. Cornwall Insight also indicated a small drop in the price cap in January could occur, but the outcome would depend on geopolitical developments, weather, policy costs and any new charges linked to investment in new nuclear capacity. Dr Craig Lowrey of Cornwall Insight said higher bills will not be welcomed by households as winter approaches, even as some costs are directed at those most in need.