Britain hit by biggest energy hike since 2022
Key Points
- Ofgem raised the energy price cap by 13% from 1 July 2026, the biggest rise since 2022
- The cap goes from £1,641 to £1,862 a year for a typical household
- Summer bills rise by just £21 because gas use is lowest between July and September
- Gas unit prices rise 28% under the new cap, but only 7% of annual gas use falls in the summer quarter
- The Resolution Foundation backs the Government's decision to delay targeted energy support until winter
Britain’s energy price cap will rise 13% from 1 July, adding £21 to a typical household’s summer bill. The cap will increase from £1,641 to £1,862 a year, the largest jump since 2022.
Ofgem confirmed the new level on Wednesday (27 May), with the Resolution Foundation noting the increase was smaller than markets had feared at the start of the war in the Middle East.
Gas unit prices are set to rise by 28% under the new cap, but the impact on summer bills will be limited because gas use is at its lowest between July and September, with just 7% of typical annual household gas consumption falling in that quarter.
In cash terms, the new cap returns prices to the level last seen in April this year. In real terms, bills remain 20% higher than they were before the pandemic in April 2019.
The Resolution Foundation backed the government’s decision to hold off on emergency support, arguing the small summer impact justified waiting before deploying targeted help.
It is pressing ministers to use the coming months to design a Targeted Energy Discount scheme aimed at low-income households with high energy use, ready to deploy if the cap rises again in October.
The Foundation said any future support should be targeted, temporary and timely, avoiding the blank-cheque approach used during the last energy price shock.
“Any rise in the Price Cap is bad news for consumers, but the upcoming increase is smaller than many feared at the start of the war in the Middle East,” said Jonathan Marshall, Principal Economist at the Resolution Foundation.
He said higher gas prices were driving the overall increase, but with gas consumption low in the summer months, the typical household’s energy costs in the quarter ahead should increase by a modest £21.
“The Government is right to have resisted pressure to act and should save its fiscal firepower in case the Price Cap rises further in the winter,” said Marshall.
He said ministers should prepare a scheme targeted at vulnerable households, temporary in order to rein in costs, and timely so that it is ready for when the temperature drops.
Households paying by direct debit may see payments rise by more than £21 over the three months depending on individual supplier policies, though the actual cost of energy used by a typical household will only increase by £21 as a result of the cap change.
