The UK energy price cap will increase by 13% from July 1 through September 30, 2026, the energy regulator Ofgem announced yesterday [1, 2, 3]. This raises the average annual dual-fuel household bill from around £1,641 in April to approximately £1,862, a £221 increase [1, 2, 3].
Electricity prices for direct debit customers will rise from 24.67p to 26.11p per kilowatt-hour, while gas charges will jump from 5.74p to 7.33p per kWh [1].
The price cap rise is linked primarily to the ongoing war in Iran, which erupted on February 28 and disrupted global oil and gas supplies by blocking the Strait of Hormuz, a vital shipping route for energy exports [1, 2, 3]. Wholesale gas prices in Europe have roughly tripled since Russia cut exports after invading Ukraine in 2022, further driving up UK costs [1].
Alongside energy, UK petrol prices have climbed nearly 20%, and diesel prices are up more than 30% at the pump [1]. Meanwhile, unpaid household energy debts reached a record £4.5 billion earlier this year [1].
Rising energy prices are straining the UK food sector. More than 80% of UK food producers plan to raise prices due to increased costs for energy, transport, packaging, and ingredients [4]. Karen Betts, CEO of the Food and Drink Federation, said, "In the last inflation spike, companies made savings to absorb some of their rising costs, but now there’s little flexibility left to do this again." She urged the government to collaborate more closely with industry to help consumers manage soaring costs [4].
Some food manufacturers also plan job cuts or reduced investments because of higher expenses, and business confidence in the sector is at its lowest since the 2022 energy crisis triggered by Russia's invasion of Ukraine [4]. The UK government has prepared plans in May to address potential food supply disruptions linked to energy and CO2 shortages caused by the Middle East conflict [4]. Chancellor Rachel Reeves recently proposed voluntary supermarket food price freezes, although this idea has faced retailer criticism [4].
Energy bills are expected to rise further in autumn and winter as household usage increases with colder weather [1, 3]. UK Energy Secretary Ed Miliband acknowledged the impact, saying, "The rise [in energy bills] is deeply unwelcome. The government is considering additional support for vulnerable households ahead of winter" [2].
