Energy prices to ‘remain high’ as Brits brace for £221 rise | Personal Finance | Finance

Pausing the fight between the US and Iran will not lead to a rapid decline in energy prices, an expert warns. Simon Francis, coordinator End Fuel Poverty CoalitionStatements made ahead of Ofgem’s new energy ceiling price we start tomorrow (July 1).

The ceiling price from 1 July to 30 September, which is the maximum amount your supplier can charge for a unit of energy plus a fixed charge, will be £1,862 per year. This means an increase of 13 percent previous price ceiling This increase is driven by US-Israeli attacks on Iran and the subsequent closure of the Strait of Hormuz, as well as attacks on various Gulf countries to the tune of £1,641.

And when signing a contract memorandum of understanding With hostilities more or less over in June, hard-pressed Brits shouldn’t expect much relief from their energy bills any time soon.

Cornwall InsightA reputable energy data analysis company predicts only a 0.5 percent drop in the cap price in October compared to July.

What does Cornwall Insight predict?

“Our forecasts have eased slightly since May as the US-Iran 60-day ceasefire and ongoing negotiations have helped stabilize wholesale gas markets. However, conflicting reports on the reopening of the Strait of Hormuz, uneven progress in peace talks and uncertain repair times for key regional infrastructure mean prices remain high, though less volatile than in the spring,” a spokesman said. he said.

Speaking about Cornwall Insight’s prediction, Mr Francis stressed that the only way the UK could achieve cheaper bills was through a mix of renewable energy and more efficient homes.

He said: “Cornwall Insight’s forecast for a small decline in October is underwhelming. It is also based on a fragile truce in which households remain exposed to volatility in fossil fuel prices while the energy sector continues to profit.”

“Price shock profiteers will try to tell you that new North Sea licenses are the answer. It’s not so: around 90 per cent of commercially viable North Sea gas has already been extracted and the rest is sold at global market prices. The only reliable way out of the ups and downs of gas prices is home-grown renewables, better energy efficiency for buildings and accessible heat pumps for every home, a fact little recognized by Andy Burnham in his speech in Manchester yesterday.

“The government cannot wait until September to act, and the next Prime Minister will inherit the same urgency. If this is to be Andy Burnham’s vision of a restructured Britain, then the new Prime Minister must also reform how energy bills are set, with a permanent social tariff, an end to energy debt and a credible plan to reduce electricity prices.”

What about later in the year?

In a further blow, Cornwall Insight warned that even January’s price ceiling was forecast to be higher than before conflict began in the Middle East.

“Our forecasts have eased slightly since May as the US-Iran 60-day ceasefire and ongoing negotiations have helped stabilize wholesale gas markets. However, conflicting reports on the reopening of the Strait of Hormuz, uneven progress in peace talks and uncertain repair times for key regional infrastructure mean prices remain high, though less volatile than in the spring,” a spokesman said. he said.

“Our current October forecast for a typical household stands at £1,849 per year. Ofgem is updating its definition of the typical consumer from July to reflect the decline in household energy use, setting the headline figure at £1,654 under the new values. On a similar basis, this represents little change from July 2026.”

“The observation window is now at the midpoint. The high wholesale prices seen in May and parts of June will have already stabilized, meaning prices are unlikely to fall to the levels seen in the first three months of the year. The scale of any increase will depend on how much geopolitical uncertainty remains.

“While July’s high prices will be tempered by warmer weather and lower household energy use, October’s cap will come down as people turn their heating back on, having a greater impact on household finances.

“The Government has a range of options to support households during this time and the new Prime Minister may be open to providing targeted support for more vulnerable households if prices remain high. Looking further ahead, we are currently forecasting a slight reduction in the cap from January, but forecasts remain above the bills seen in the first three months of the year.”