Ofgem issues warning over change 'from today', Wednesday, July 1
Millions are waking up to higher energy bills today after the energy regulator Ofgem increased its energy price cap by 13%. The rise, which takes effect from today, July 1, means the average household paying by Direct Debit on a standard variable tariff will see annual energy costs increase from £1,641 to £1,862. In a message on X, Ofgem warned consumers: "The quarterly energy price cap will rise by 13% from today. This will be an increase of around £18 per month for the average household."
The regulator stressed that the price cap is not a cap on your total bill but instead limits the maximum suppliers can charge for each unit of gas and electricity plus the daily standing charge. Households that use more energy will still pay more. Ofgem said the increase has been driven primarily by higher wholesale gas prices following the conflict in the Middle East, although bills remain well below the peak seen during the energy crisis in 2022. The increase affects households on standard variable tariffs, including those paying by Direct Debit, standard credit, prepayment meter and Economy 7 tariffs.
However, millions of customers who have already switched to fixed-rate deals are protected from today's increase. Although the cap has risen sharply, many households will not immediately feel the full effect because the higher prices arrive during the summer when heating use is far lower than in winter.
There may also be better news on the horizon. Falling wholesale gas prices following an easing of tensions in the Middle East have improved forecasts for the next price cap, which will apply from October to December. Energy consultancy Cornwall Insight suggests the October cap could be slightly lower than the July level, forecasting a cap of about £1,849, around 0.5% below today's level. Consumers who are still on default tariffs are being urged to check whether they can save money by switching to a fixed-rate deal, with many fixed tariffs currently available below the new price cap.