Bills to climb in October, with worse to come in January

26 August 2026

Household energy bills are forecast to rise by a further 9% in January, after Ofgem confirmed a 4% increase to its price cap from October.

The average annual bill under the cap will rise to £1,723 from October, up from the current level, while Cornwall Insight forecasts it could reach £1,872 between January and March. The January figure will not be confirmed until November and could change if wholesale energy prices move significantly.

Wholesale energy costs account for more than 40% of the price cap, according to Cornwall Insight, which said gas prices had risen in recent weeks as uncertainty over the conflict in the Middle East affected markets. Low gas stocks in Europe, supply disruption in Norway and strong demand from Asia have also contributed to higher prices.

The consultancy said that even if the conflict ended immediately, colder weather and low gas stocks could keep prices elevated into the winter. It said this meant a fall in bills in January was unlikely, although market conditions could change before the next cap is set.

The prospect of higher bills over the winter is likely to increase pressure on the government to set out how it intends to support households struggling with energy costs. Possible measures could include targeted payments or changes to how energy is priced for households in need.

Dr Craig Lowrey, principal consultant at Cornwall Insight:

“Households will see rising energy bills going into winter, with the risk that unfortunately January will bring even more hardship. What is frustrating is these rises, as we have seen time and time again, have very little to do with what is happening in Britain. The market is reacting to events thousands of miles away, and low European gas stock levels that were already tight even before the heatwave. It certainly makes a case for reducing our reliance on the volatile gas markets.

“Where January bills land will depend on whether the situation in the Middle East calms down in the next couple of months. However, even if we saw an end to the conflict, lower stocks going into winter as demand increases mean falling bills in January is unlikely. Households who will feel the bill rises most are those who can least afford it, and it is vital that any support reaches the most vulnerable first. That’s why the Budget in November matters so much. Households need to know what kind of support, if any, is coming, and when, so they can plan for the cold months ahead.”

The January price cap is expected to be confirmed in November. The government’s Budget is also due that month, when households could learn more about any measures intended to help with energy costs.

Ned Hammond, Energy UK’s deputy director, customers:

“Coming off the back of a significant hike over summer, this further intensifies the challenges faced by customers struggling to afford their bills. That’s why this week we’ve already raised the alarm again about customer debt, which is now at a record £6 billion – and detailed how a social discount scheme could provide much more effective and lasting help with energy bills for those households most in need.

“As well as measures to improve targeted support, the Government needs to assess how to bring bills down over the longer term. The impact the conflict in the Middle East has had on gas prices underlines why we need to move to using more of our own sources of clean energy. But it’s equally true that we need to look at a fairer way of funding the policy and system costs that are also driving bills higher.