Household energy bills are expected to edge upwards again this October, despite the fact that wholesale energy prices have been falling. New forecasts suggest the average bill will rise by around 1%, leaving millions of households paying even more than they already do.
According to analysis by Cornwall Insight, a typical annual bill will increase by about £17, reaching £1,737 under Ofgem’s latest price cap. The regulator is due to formally confirm the new cap level on August 27.
This represents a reversal from Cornwall Insight’s earlier forecast in July, which predicted a small 1% drop in bills by autumn as global tensions in the Middle East appeared to ease. However, the consultancy has now revised its outlook after factoring in changes it expects Ofgem to implement, including an expansion of the Warm Home Discount scheme. While this policy will extend support worth £150 to an additional 2.7 million vulnerable households, it also adds roughly £15 to the typical energy bill—meaning many consumers will effectively pay more so others can receive targeted help.
Despite the rationale behind such schemes, the optics are not good for Ofgem. Once again, households are being told to absorb higher costs, even though the wholesale price of energy—the supposed basis for the regulator’s cap—has been falling. Consumers are left questioning whether the “price cap” truly protects them at all, or whether it has become a mechanism for simply passing through additional costs.
