Energy Bills Forecast to Rise Sharply This Summer
Households in Great Britain are expected to face an increase in energy bills of approximately £290 annually, bringing the total to nearly £2,000 from this summer. This rise is considered a “tough pill to swallow” for consumers who are already preparing for multiple cost increases starting Wednesday.
According to analysis by energy consultancy Cornwall Insight, a typical gas and electricity bill is projected to reach £1,929 per year from July under the industry regulator Ofgem’s quarterly price cap. This forecast represents an increase of £288 compared to the price cap set for April to June, following the escalation of the war in the Middle East which has pushed the UK’s gas market to its highest levels in over three years.
While the April price cap will decrease by £117 annually, or 7%, compared to the previous period, this reduction is attributed to Chancellor Rachel Reeves’ commitment to lower bills by transferring some green energy costs from bills to general taxation. However, this temporary relief is expected to be outweighed by a series of cost increases that households will face during the spring.
Additional Cost Increases in Essentials
From April, the annual cost of essential services such as council tax and water is set to rise by more than £200, even before the economic effects of the Middle East conflict are fully realized by households.
Most households in England and Wales will experience an approximate 5% increase in council tax, while in Scotland, council tax bills are expected to rise between 4% and 10%. In Northern Ireland, rates are also due to increase, though specific percentages were not detailed.
Water bills in England and Wales will increase by an average of 5.4%, reaching £639 annually from April. Additionally, the costs for phones and broadband services are anticipated to rise, with average annual increases of £39.60 for broadband and £27.60 for mobile contracts, according to data from Uswitch.
Government Response and Oil Market Impact
Senior government ministers are scheduled to discuss the ongoing economic impact of the Middle East war at a Cobra meeting on Tuesday. This follows consultations with business leaders on how the government and private sector can collaborate to address the crisis caused by surging oil prices.
The international oil benchmark, Brent crude, rose by 4% to $117 per barrel on Tuesday after former US President Donald Trump urged countries like the UK to demonstrate the “courage” to intervene in the Strait of Hormuz and secure fuel supplies. Experts warn that Brent crude prices could reach historic highs of $150 per barrel if the conflict persists.
“Bills going up again because of war thousands of miles away will be a tough pill to swallow for households still saddled with debt from last time,” said Jess Ralston, head of energy at the Energy and Climate Intelligence Unit (ECIU).
“Unless we continue [to] shift away from gas, whether it comes , the risk remains that bills will continue to spike,” Ralston added.
Global Energy Price Effects and UK Fuel Costs
Rising energy prices have already prompted emergency measures in parts of Asia, which heavily depend on Middle Eastern energy supplies. Even in the United States, the world’s largest energy exporter, road fuel prices have surpassed $4 per gallon for the first time in four years.
UK drivers are facing over £500 million in increased fuel costs due to the oil crisis triggered by Iran’s control over global oil exports through the Strait of Hormuz, according to the RAC Foundation.
Diesel prices have risen to an average of 182.77p per litre, making the cost to fill a typical 55-litre family car exceed £100 for the first time since early December 2022. Petrol prices have also climbed, with a full tank costing approximately £84 as pump prices average 152.83p per litre.
The sharp increase in fuel prices has led many drivers to seek lower prices at supermarket forecourts, which has put pressure on fuel supplies at some locations.
The AA reported that petrol prices at supermarket forecourts were on average 7.6p per litre lower last week than at other sites, compared to a 5.4p difference before the Middle East conflict began late last month.
Rising Energy Debt and Government Measures
Separate figures from Ofgem reveal that the collective debt owed by two million British households to their energy suppliers reached a record £4.55 billion at the end of last year, increasing by £7 million during the final three months of 2025.
Martin McCluskey, the minister for energy consumers, stated:
“Action taken by this government on bills will see the energy price cap coming down from tomorrow. This reduction is fixed until the end of June, protecting millions of households with lower bills this spring.
“Tackling the affordability crisis is our number one priority and I know many families will be thinking about how events in the Middle East might impact the cost of living at home. We will continue to fight people’s corner through this crisis … if it’s necessary to intervene, we will.”
