UK Energy Price Cap Set to Surge Amid Middle East Conflict, Prompting Calls for Targeted Support

From July 2026 the UK energy price cap is projected to lift the average dual-fuel household bill to nearly £1,900 a year – an increase of about 13 % or £209. Unit rates are set to rise to 26.03 pence per kilowatt-hour for electricity and 7 pence per kilowatt-hour for gas. The jump follows a sharp surge in wholesale gas prices after the Iran-US confrontation in the Strait of Hormuz doubled UK gas market costs earlier in the year. Analysts warn the cap will remain above pre-crisis levels into early winter, keeping bills high as heating demand climbs.

The Guardian

Chancellor Rachel Reeves announced a “Great British summer savings” package that cuts VAT on attractions and children’s meals, while indicating any energy-bill assistance would be limited to targeted, temporary measures. The Treasury described the situation as premature for winter intervention, noting that contingency plans are being prepared pending the outcome of the Middle-East conflict. Ofgem signalled a possible revision of average household consumption assumptions, which could soften the apparent cap increase. Cornwall Insight’s Craig Lowrey warned that without an autumn reduction the government would need to devise additional support for the most vulnerable households. Fuel Poverty Action Campaign director Simon Francis criticised the delay, saying it fuels anxiety for households paying on direct debit. A government spokesperson reiterated that addressing the affordability crisis remains a top priority and called for a shift toward clean, domestically produced power.

The Guardian

Cornwall Insight’s 26.03 p/kWh electricity forecast clashes with Ofgem’s pending review of average consumption, leaving the true cap impact uncertain. No definitive winter-time price data have been published, so the scale of any future support remains unclear. The Treasury says contingency plans are under development for the winter months.

The Guardian

• “We had hoped that the predictions of a huge rise in the price cap could have been the moment for ministers to show they are prepared to go further and faster in their determination to bring down bills,” — Simon Francis, Fuel Poverty Action Campaign

The Guardian

• “Craig Lowrey, the principal consultant at Cornwall, said that unless the price cap drops in the autumn, the government “will need to think seriously about targeted support for the most vulnerable”.” — Craig Lowrey, Principal Consultant, Cornwall Insight

The Guardian

• “We know families will be concerned about the impact the conflict in the Middle East will have on their energy bills. Tackling the affordability crisis is our number one priority. The lesson of yet another fossil fuel crisis is the UK needs to get off the fossil fuel rollercoaster and on to clean, homegrown power we control.” — Government spokesperson

The Guardian