Cornwall Insight predicts rise in price cap of nearly 13% in Great Britain as Iran war pushes up gas costs
Energy bills for households in Great Britain could increase by more than £200 a year to almost £1,900 from this summer in “a kick in the teeth” for millions struggling with the cost of living crisis.
A typical gas and electricity bill is forecast to rise to the equivalent of £1,850 a year from July under the industry regulator Ofgem’s quarterly price cap, according to analysis by the energy consultancy Cornwall Insight.
The expected level is nearly 13% higher than the £1,641 cap on energy bills set for April to June, adding £209 to a typical annual bill, after the Iran war caused the UK’s gas market price to double earlier this year.
The main driver for the increase is rising wholesale energy prices, according to Cornwall. Prices climbed sharply in February and March after Tehran effectively cut off Gulf energy supplies to the global market by shutting the strait of Hormuz in response to the US-Israeli strikes on Iran.
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Cornwall said that, even if the Iran war ended tomorrow, “the physical damage to infrastructure, and lingering effect of disrupted supply, means a fall back to April’s price cap levels in the autumn looks unlikely”.
Its principal consultant, Craig Lowrey, said: “If the cap stays at a similar level as July, that is when the government will need to think seriously about targeted support for the most vulnerable.
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